Correlation Between Global Payout and Dolphin Entertainment

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

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

Diversification Opportunities for Global Payout and Dolphin Entertainment

-0.04

Correlation Coefficient

Global Payout  Dolphin Entertainment

Good diversification

The 3 months correlation between Global and Dolphin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Payout and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment and Global Payout 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 Global Payout are associated (or correlated) with Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Global Payout i.e., Global Payout and Dolphin Entertainment go up and down completely randomly.

Pair Corralation between Global Payout and Dolphin Entertainment

Given the investment horizon of 90 days Global Payout is expected to under-perform the Dolphin Entertainment. In addition to that, Global Payout is 3.41 times more volatile than Dolphin Entertainment. It trades about -0.02 of its total potential returns per unit of risk. Dolphin Entertainment is currently generating about -0.02 per unit of volatility. If you would invest  142.00  in Dolphin Entertainment on September 4, 2024 and sell it today you would lose (17.00) from holding Dolphin Entertainment or give up 11.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Global Payout  vs.  Dolphin Entertainment

Global Payout

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Payout has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Dolphin Entertainment

Risk-Adjusted Performance

0 of 100

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 latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Global Payout and Dolphin Entertainment

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

The idea behind Global Payout and Dolphin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.