Correlation Between 500 and Six Flags
Can any of the company-specific risk be diversified away by investing in both 500 and Six Flags 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 500 and Six Flags into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 500 and Six Flags Entertainment, you can compare the effects of market volatilities on 500 and Six Flags 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 500 with a short position of Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of 500 and Six Flags.
Diversification Opportunities for 500 and Six Flags
Pay attention - limited upside
The 3 months correlation between 500 and Six is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 500 and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment and 500 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 500 are associated (or correlated) with Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of 500 i.e., 500 and Six Flags go up and down completely randomly.
Pair Corralation between 500 and Six Flags
If you would invest (100.00) in 500 on January 26, 2024 and sell it today you would earn a total of 100.00 from holding 500 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 |
500 vs. Six Flags Entertainment
Performance |
| Timeline |
| 500 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Six Flags Entertainment |
500 and Six Flags Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 500 and Six Flags
The main advantage of trading using opposite 500 and Six Flags positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 500 position performs unexpectedly, Six Flags 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 Six Flags will offset losses from the drop in Six Flags' long position.The idea behind 500 and Six Flags 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.| Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors | Six Flags vs. Acushnet Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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