Correlation Between Chicago Atlantic and Disney

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

By analyzing existing cross correlation between Chicago Atlantic Real and Walt Disney, you can compare the effects of market volatilities on Chicago Atlantic and Disney 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 Chicago Atlantic with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Disney.

Diversification Opportunities for Chicago Atlantic and Disney

-0.08

Correlation Coefficient

Chicago Atlantic  Disney

Good diversification

The 3 months correlation between Chicago and Disney is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic Real and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Chicago Atlantic 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 Chicago Atlantic Real are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Chicago Atlantic i.e., Chicago Atlantic and Disney go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Disney

Given the investment horizon of 90 days Chicago Atlantic Real is expected to generate 0.7 times more return on investment than Disney. However, Chicago Atlantic Real is 1.42 times less risky than Disney. It trades about 0.05 of its potential returns per unit of risk. Walt Disney is currently generating about -0.13 per unit of risk. If you would invest  1,515  in Chicago Atlantic Real on December 19, 2024 and sell it today you would earn a total of  37.00  from holding Chicago Atlantic Real or generate 2.44% return on investment over 90 days.

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

Chicago Atlantic Real  vs.  Walt Disney

Chicago Atlantic Real

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic Real are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Walt Disney

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walt Disney has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Chicago Atlantic and Disney

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

The idea behind Chicago Atlantic Real and Walt Disney 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.