Correlation Between Six Flags and Polaris Industries
Can any of the company-specific risk be diversified away by investing in both Six Flags and Polaris Industries 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 Six Flags and Polaris Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Flags Entertainment and Polaris Industries, you can compare the effects of market volatilities on Six Flags and Polaris Industries 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 Six Flags with a short position of Polaris Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Flags and Polaris Industries.
Diversification Opportunities for Six Flags and Polaris Industries
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Six and Polaris is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Six Flags Entertainment and Polaris Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Industries and Six Flags 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 Six Flags Entertainment are associated (or correlated) with Polaris Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Industries has no effect on the direction of Six Flags i.e., Six Flags and Polaris Industries go up and down completely randomly.
Pair Corralation between Six Flags and Polaris Industries
Considering the 90-day investment horizon Six Flags Entertainment is expected to generate 0.89 times more return on investment than Polaris Industries. However, Six Flags Entertainment is 1.13 times less risky than Polaris Industries. It trades about -0.05 of its potential returns per unit of risk. Polaris Industries is currently generating about -0.36 per unit of risk. If you would invest 2,523 in Six Flags Entertainment on February 3, 2024 and sell it today you would lose (51.00) from holding Six Flags Entertainment or give up 2.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Six Flags Entertainment vs. Polaris Industries
Performance |
Timeline |
Six Flags Entertainment |
Polaris Industries |
Six Flags and Polaris Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Six Flags and Polaris Industries
The main advantage of trading using opposite Six Flags and Polaris Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Flags position performs unexpectedly, Polaris Industries 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 Polaris Industries will offset losses from the drop in Polaris Industries' long position.Six Flags vs. JAKKS Pacific | Six Flags vs. Acushnet Holdings Corp | Six Flags vs. Funko Inc | Six Flags vs. Callaway Golf |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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