Correlation Between Six Flags and BLACK

Can any of the company-specific risk be diversified away by investing in both Six Flags and BLACK 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 Six Flags and BLACK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Six Flags Entertainment and BLACK HILLS P, you can compare the effects of market volatilities on Six Flags and BLACK 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 Six Flags with a short position of BLACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and BLACK.

Diversification Opportunities for Six Flags and BLACK

-0.29

Correlation Coefficient

Six Flags  BLACK

Very good diversification

The 3 months correlation between Six and BLACK is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and BLACK HILLS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLACK HILLS P and Six Flags 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 Six Flags Entertainment are associated (or correlated) with BLACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLACK HILLS P has no effect on the direction of Six Flags i.e., Six Flags and BLACK go up and down completely randomly.

Pair Corralation between Six Flags and BLACK

Considering the 90-day investment horizon Six Flags Entertainment is expected to generate 1.87 times more return on investment than BLACK. However, Six Flags is 1.87 times more volatile than BLACK HILLS P. It trades about -0.1 of its potential returns per unit of risk. BLACK HILLS P is currently generating about -0.21 per unit of risk. If you would invest  4,640  in Six Flags Entertainment on October 20, 2024 and sell it today you would lose (202.00) from holding Six Flags Entertainment or give up 4.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Six Flags Entertainment  vs.  BLACK HILLS P

Six Flags Entertainment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Entertainment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Six Flags may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BLACK HILLS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BLACK HILLS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BLACK HILLS P investors.

Pair Trading with Six Flags and BLACK

The main advantage of trading using opposite Six Flags and BLACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, BLACK 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 BLACK will offset losses from the drop in BLACK's long position.

The idea behind Six Flags Entertainment and BLACK HILLS P 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.