Correlation Between Six Flags and PACIFIC

Can any of the company-specific risk be diversified away by investing in both Six Flags and PACIFIC 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 PACIFIC 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 PACIFIC GAS AND, you can compare the effects of market volatilities on Six Flags and PACIFIC 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 PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and PACIFIC.

Diversification Opportunities for Six Flags and PACIFIC

-0.49

Correlation Coefficient

Six Flags  PACIFIC

Very good diversification

The 3 months correlation between Six and PACIFIC is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and PACIFIC GAS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS AND 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS AND has no effect on the direction of Six Flags i.e., Six Flags and PACIFIC go up and down completely randomly.

Pair Corralation between Six Flags and PACIFIC

Considering the 90-day investment horizon Six Flags is expected to generate 1.18 times less return on investment than PACIFIC. In addition to that, Six Flags is 1.1 times more volatile than PACIFIC GAS AND. It trades about 0.03 of its total potential returns per unit of risk. PACIFIC GAS AND is currently generating about 0.04 per unit of volatility. If you would invest  8,322  in PACIFIC GAS AND on October 5, 2024 and sell it today you would earn a total of  2,581  from holding PACIFIC GAS AND or generate 31.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

Six Flags Entertainment  vs.  PACIFIC GAS AND

Six Flags Entertainment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Entertainment are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Six Flags displayed solid returns over the last few months and may actually be approaching a breakup point.

PACIFIC GAS AND

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PACIFIC GAS AND are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, PACIFIC sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Six Flags and PACIFIC

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

The idea behind Six Flags Entertainment and PACIFIC GAS AND 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.