Correlation Between Spire Healthcare and Hollywood Bowl

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Can any of the company-specific risk be diversified away by investing in both Spire Healthcare and Hollywood Bowl 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 Spire Healthcare and Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Hollywood Bowl Group, you can compare the effects of market volatilities on Spire Healthcare and Hollywood Bowl 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 Spire Healthcare with a short position of Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Hollywood Bowl.

Diversification Opportunities for Spire Healthcare and Hollywood Bowl

SpireHollywoodDiversified AwaySpireHollywoodDiversified Away100%
-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Spire and Hollywood is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group and Spire Healthcare 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 Spire Healthcare Group are associated (or correlated) with Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Hollywood Bowl go up and down completely randomly.

Pair Corralation between Spire Healthcare and Hollywood Bowl

Assuming the 90 days trading horizon Spire Healthcare Group is expected to generate 0.57 times more return on investment than Hollywood Bowl. However, Spire Healthcare Group is 1.76 times less risky than Hollywood Bowl. It trades about 0.07 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.1 per unit of risk. If you would invest  22,000  in Spire Healthcare Group on November 19, 2024 and sell it today you would earn a total of  950.00  from holding Spire Healthcare Group or generate 4.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Spire Healthcare Group  vs.  Hollywood Bowl Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15SPI BOWL
       Timeline  
Spire Healthcare 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Spire Healthcare Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Spire Healthcare is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb215220225230235240
Hollywood Bowl Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Hollywood Bowl Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb270280290300310320330

Spire Healthcare and Hollywood Bowl Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.48-2.6-1.73-0.860.00.881.792.73.614.52 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15SPI BOWL
       Returns  

Pair Trading with Spire Healthcare and Hollywood Bowl

The main advantage of trading using opposite Spire Healthcare and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.
The idea behind Spire Healthcare Group and Hollywood Bowl Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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