Correlation Between Bishop Capital and Holiday Island

Can any of the company-specific risk be diversified away by investing in both Bishop Capital and Holiday Island 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 Bishop Capital and Holiday Island into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bishop Capital Corp and Holiday Island Holdings, you can compare the effects of market volatilities on Bishop Capital and Holiday Island 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 Bishop Capital with a short position of Holiday Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bishop Capital and Holiday Island.

Diversification Opportunities for Bishop Capital and Holiday Island

0.0

Correlation Coefficient

Bishop Capital  Holiday Island

Pay attention - limited upside

The 3 months correlation between Bishop and Holiday is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bishop Capital Corp and Holiday Island Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holiday Island Holdings and Bishop Capital 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 Bishop Capital Corp are associated (or correlated) with Holiday Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holiday Island Holdings has no effect on the direction of Bishop Capital i.e., Bishop Capital and Holiday Island go up and down completely randomly.

Pair Corralation between Bishop Capital and Holiday Island

If you would invest  2.80  in Holiday Island Holdings on February 20, 2024 and sell it today you would earn a total of  1.20  from holding Holiday Island Holdings or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bishop Capital Corp  vs.  Holiday Island Holdings

Bishop Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bishop Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Bishop Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Holiday Island Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Holiday Island Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Holiday Island demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bishop Capital and Holiday Island

The main advantage of trading using opposite Bishop Capital and Holiday Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bishop Capital position performs unexpectedly, Holiday Island 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 Holiday Island will offset losses from the drop in Holiday Island's long position.

The idea behind Bishop Capital Corp and Holiday Island Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.