Correlation Between Disney and Global Eagle
Can any of the company-specific risk be diversified away by investing in both Disney and Global Eagle 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 Disney and Global Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Global Eagle Entertainment, you can compare the effects of market volatilities on Disney and Global Eagle 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 Disney with a short position of Global Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Global Eagle.
Diversification Opportunities for Disney and Global Eagle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Disney and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Global Eagle Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Eagle Enterta and Disney 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 Walt Disney are associated (or correlated) with Global Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Eagle Enterta has no effect on the direction of Disney i.e., Disney and Global Eagle go up and down completely randomly.
Pair Corralation between Disney and Global Eagle
If you would invest 10,942 in Walt Disney on December 29, 2023 and sell it today you would earn a total of 1,156 from holding Walt Disney or generate 10.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Walt Disney vs. Global Eagle Entertainment
Performance |
Timeline |
Walt Disney |
Global Eagle Enterta |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Disney and Global Eagle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Disney and Global Eagle
The main advantage of trading using opposite Disney and Global Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Global Eagle 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 Global Eagle will offset losses from the drop in Global Eagle's long position.The idea behind Walt Disney and Global Eagle 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.Global Eagle vs. Papaya Growth Opportunity | Global Eagle vs. Falcon Metals Limited | Global Eagle vs. Sabra Healthcare REIT | Global Eagle vs. Pyrophyte Acquisition Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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