Correlation Between Corus Entertainment and Disney

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

By analyzing existing cross correlation between Corus Entertainment and Walt Disney, you can compare the effects of market volatilities on Corus Entertainment and Disney 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 Corus Entertainment with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corus Entertainment and Disney.

Diversification Opportunities for Corus Entertainment and Disney

0.04

Correlation Coefficient

Corus Entertainment  Disney

Significant diversification

The 3 months correlation between Corus and Disney is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Corus Entertainment and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Corus Entertainment 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 Corus Entertainment are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Corus Entertainment i.e., Corus Entertainment and Disney go up and down completely randomly.

Pair Corralation between Corus Entertainment and Disney

If you would invest  54.00  in Corus Entertainment on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Corus Entertainment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	10.0%
Values	Daily Returns

Corus Entertainment  vs.  Walt Disney

Corus Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corus Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Walt Disney

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corus Entertainment and Disney

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

The idea behind Corus Entertainment and Walt Disney 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.