Correlation Between Warner Bros and Able View

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

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

Diversification Opportunities for Warner Bros and Able View

-0.83

Correlation Coefficient

Warner Bros  Able View

Pay attention - limited upside

The 3 months correlation between Warner and Able is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global and Warner Bros 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 Warner Bros Discovery are associated (or correlated) with Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of Warner Bros i.e., Warner Bros and Able View go up and down completely randomly.

Pair Corralation between Warner Bros and Able View

Considering the 90-day investment horizon Warner Bros Discovery is expected to generate 0.51 times more return on investment than Able View. However, Warner Bros Discovery is 1.95 times less risky than Able View. It trades about 0.06 of its potential returns per unit of risk. Able View Global is currently generating about -0.03 per unit of risk. If you would invest  854.00  in Warner Bros Discovery on October 8, 2024 and sell it today you would earn a total of  229.00  from holding Warner Bros Discovery or generate 26.81% return on investment over 90 days.

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

Warner Bros Discovery  vs.  Able View Global

Warner Bros Discovery

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Warner Bros Discovery are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental drivers, Warner Bros exhibited solid returns over the last few months and may actually be approaching a breakup point.

Able View Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Able View Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Warner Bros and Able View

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

The idea behind Warner Bros Discovery and Able View Global 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.