Correlation Between Hall Of and American Picture

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

By analyzing existing cross correlation between Hall of Fame and American Picture House, you can compare the effects of market volatilities on Hall Of and American Picture 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 Hall Of with a short position of American Picture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hall Of and American Picture.

Diversification Opportunities for Hall Of and American Picture

0.44

Correlation Coefficient

Hall Of  American Picture

Very weak diversification

The 3 months correlation between Hall and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hall of Fame and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House and Hall Of 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 Hall of Fame are associated (or correlated) with American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of Hall Of i.e., Hall Of and American Picture go up and down completely randomly.

Pair Corralation between Hall Of and American Picture

Assuming the 90 days horizon Hall of Fame is expected to generate 1.68 times more return on investment than American Picture. However, Hall Of is 1.68 times more volatile than American Picture House. It trades about 0.39 of its potential returns per unit of risk. American Picture House is currently generating about 0.29 per unit of risk. If you would invest  0.46  in Hall of Fame on October 22, 2024 and sell it today you would earn a total of  0.47  from holding Hall of Fame or generate 102.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.21%
Values	Daily Returns

Hall of Fame  vs.  American Picture House

Hall of Fame

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hall of Fame are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hall Of showed solid returns over the last few months and may actually be approaching a breakup point.

American Picture House

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Picture House are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical indicators, American Picture reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hall Of and American Picture

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

The idea behind Hall of Fame and American Picture House 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.