Correlation Between Madison Square and Hollywall Entertainment

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

By analyzing existing cross correlation between Madison Square Garden and Hollywall Entertainment, you can compare the effects of market volatilities on Madison Square and Hollywall Entertainment 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 Madison Square with a short position of Hollywall Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Square and Hollywall Entertainment.

Diversification Opportunities for Madison Square and Hollywall Entertainment

-0.14

Correlation Coefficient

Madison Square  Hollywall Entertainment

Good diversification

The 3 months correlation between Madison and Hollywall is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Madison Square Garden and Hollywall Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywall Entertainment and Madison Square 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 Madison Square Garden are associated (or correlated) with Hollywall Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywall Entertainment has no effect on the direction of Madison Square i.e., Madison Square and Hollywall Entertainment go up and down completely randomly.

Pair Corralation between Madison Square and Hollywall Entertainment

Given the investment horizon of 90 days Madison Square Garden is expected to under-perform the Hollywall Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Madison Square Garden is 27.44 times less risky than Hollywall Entertainment. The stock trades about -0.21 of its potential returns per unit of risk. The Hollywall Entertainment is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2.60  in Hollywall Entertainment on December 30, 2024 and sell it today you would earn a total of  7.40  from holding Hollywall Entertainment or generate 284.62% return on investment over 90 days.

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

Madison Square Garden  vs.  Hollywall Entertainment

Madison Square Garden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Madison Square Garden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hollywall Entertainment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hollywall Entertainment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Hollywall Entertainment disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Madison Square and Hollywall Entertainment

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

The idea behind Madison Square Garden and Hollywall Entertainment 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.