Correlation Between Warner Bros and Lingerie Fighting

Can any of the company-specific risk be diversified away by investing in both Warner Bros and Lingerie Fighting 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 Lingerie Fighting 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 Lingerie Fighting Championships, you can compare the effects of market volatilities on Warner Bros and Lingerie Fighting 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 Lingerie Fighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Bros and Lingerie Fighting.

Diversification Opportunities for Warner Bros and Lingerie Fighting

-0.43

Correlation Coefficient

Warner Bros  Lingerie Fighting

Very good diversification

The 3 months correlation between Warner and Lingerie is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and Lingerie Fighting Championship in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingerie Fighting 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 Lingerie Fighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingerie Fighting has no effect on the direction of Warner Bros i.e., Warner Bros and Lingerie Fighting go up and down completely randomly.

Pair Corralation between Warner Bros and Lingerie Fighting

Considering the 90-day investment horizon Warner Bros is expected to generate 342.55 times less return on investment than Lingerie Fighting. But when comparing it to its historical volatility, Warner Bros Discovery is 70.3 times less risky than Lingerie Fighting. It trades about 0.03 of its potential returns per unit of risk. Lingerie Fighting Championships is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Lingerie Fighting Championships on December 26, 2024 and sell it today you would lose (0.01) from holding Lingerie Fighting Championships or give up 50.0% of portfolio value over 90 days.

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

Warner Bros Discovery  vs.  Lingerie Fighting Championship

Warner Bros Discovery

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Warner Bros Discovery are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Warner Bros is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lingerie Fighting

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lingerie Fighting Championships are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Lingerie Fighting showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Warner Bros and Lingerie Fighting

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

The idea behind Warner Bros Discovery and Lingerie Fighting Championships 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.