Correlation Between Roku and Golf
Can any of the company-specific risk be diversified away by investing in both Roku and Golf 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 Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and Golf Co Group, you can compare the effects of market volatilities on Roku and Golf 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 Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and Golf.
Diversification Opportunities for Roku and Golf
Very good diversification
The 3 months correlation between Roku and Golf is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and Golf Co Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golf Co Group 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 Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golf Co Group has no effect on the direction of Roku i.e., Roku and Golf go up and down completely randomly.
Pair Corralation between Roku and Golf
Given the investment horizon of 90 days Roku Inc is expected to generate 0.93 times more return on investment than Golf. However, Roku Inc is 1.08 times less risky than Golf. It trades about 0.0 of its potential returns per unit of risk. Golf Co Group is currently generating about -0.02 per unit of risk. If you would invest 10,245 in Roku Inc on January 25, 2024 and sell it today you would lose (4,105) from holding Roku Inc or give up 40.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.79% |
| Values | Daily Returns |
Roku Inc vs. Golf Co Group
Performance |
| Timeline |
| Roku Inc |
| Golf Co Group |
Roku and Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and Golf
The main advantage of trading using opposite Roku and Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, Golf 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 Golf will offset losses from the drop in Golf's long position.The idea behind Roku Inc and Golf Co Group 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.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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