Correlation Between Dolphin Entertainment and TKO Group

Can any of the company-specific risk be diversified away by investing in both Dolphin Entertainment and TKO Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dolphin Entertainment and TKO Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dolphin Entertainment and TKO Group Holdings,, you can compare the effects of market volatilities on Dolphin Entertainment and TKO Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dolphin Entertainment with a short position of TKO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Entertainment and TKO Group.

Diversification Opportunities for Dolphin Entertainment and TKO Group

-0.02

Correlation Coefficient

Dolphin Entertainment  TKO Group

Good diversification

The 3 months correlation between Dolphin and TKO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and TKO Group Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKO Group Holdings, and Dolphin Entertainment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dolphin Entertainment are associated (or correlated) with TKO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKO Group Holdings, has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and TKO Group go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and TKO Group

Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the TKO Group. In addition to that, Dolphin Entertainment is 2.25 times more volatile than TKO Group Holdings,. It trades about -0.02 of its total potential returns per unit of risk. TKO Group Holdings, is currently generating about 0.07 per unit of volatility. If you would invest  14,363  in TKO Group Holdings, on December 27, 2024 and sell it today you would earn a total of  1,098  from holding TKO Group Holdings, or generate 7.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dolphin Entertainment  vs.  TKO Group Holdings,

Dolphin Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dolphin Entertainment is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

TKO Group Holdings,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TKO Group Holdings, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, TKO Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dolphin Entertainment and TKO Group

The main advantage of trading using opposite Dolphin Entertainment and TKO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment position performs unexpectedly, TKO Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TKO Group will offset losses from the drop in TKO Group's long position.

The idea behind Dolphin Entertainment and TKO Group Holdings, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.