Correlation Between Roku and DISH Network
Can any of the company-specific risk be diversified away by investing in both Roku and DISH Network 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 Roku and DISH Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and DISH Network, you can compare the effects of market volatilities on Roku and DISH Network 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 Roku with a short position of DISH Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and DISH Network.
Diversification Opportunities for Roku and DISH Network
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roku and DISH is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and DISH Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISH Network and Roku 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 Roku Inc are associated (or correlated) with DISH Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISH Network has no effect on the direction of Roku i.e., Roku and DISH Network go up and down completely randomly.
Pair Corralation between Roku and DISH Network
Given the investment horizon of 90 days Roku Inc is expected to generate 1.04 times more return on investment than DISH Network. However, Roku is 1.04 times more volatile than DISH Network. It trades about 0.0 of its potential returns per unit of risk. DISH Network is currently generating about -0.05 per unit of risk. If you would invest 9,206 in Roku Inc on January 25, 2024 and sell it today you would lose (3,023) from holding Roku Inc or give up 32.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.86% |
| Values | Daily Returns |
Roku Inc vs. DISH Network
Performance |
| Timeline |
| Roku Inc |
| DISH Network |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Roku and DISH Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and DISH Network
The main advantage of trading using opposite Roku and DISH Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, DISH Network 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 DISH Network will offset losses from the drop in DISH Network's long position.The idea behind Roku Inc and DISH Network 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.| DISH Network vs. Verizon Communications | DISH Network vs. ATT Inc | DISH Network vs. Comcast Corp | DISH Network vs. Charter Communications |
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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