Correlation Between SINA and Disney
Can any of the company-specific risk be diversified away by investing in both SINA 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 SINA and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINA Corporation and Walt Disney, you can compare the effects of market volatilities on SINA 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 SINA with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINA and Disney.
Diversification Opportunities for SINA and Disney
Pay attention - limited upside
The 3 months correlation between SINA and Disney is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SINA Corp. and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and SINA 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 SINA Corporation 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 SINA i.e., SINA and Disney go up and down completely randomly.
Pair Corralation between SINA and Disney
If you would invest (100.00) in SINA Corporation on January 19, 2024 and sell it today you would earn a total of 100.00 from holding SINA Corporation or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
SINA Corp. vs. Walt Disney
Performance |
Timeline |
SINA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walt Disney |
SINA and Disney Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SINA and Disney
The main advantage of trading using opposite SINA and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINA 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 SINA Corporation 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.Disney vs. Roku Inc | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery | Disney vs. Paramount Global Class |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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