Correlation Between Dolphin Entertainment and Urban One

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

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

Diversification Opportunities for Dolphin Entertainment and Urban One

0.69

Correlation Coefficient

Dolphin Entertainment  Urban One

Poor diversification

The 3 months correlation between Dolphin and Urban is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and Urban One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban One and Dolphin 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 Dolphin Entertainment are associated (or correlated) with Urban One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban One has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and Urban One go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Urban One

Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 0.53 times more return on investment than Urban One. However, Dolphin Entertainment is 1.88 times less risky than Urban One. It trades about -0.16 of its potential returns per unit of risk. Urban One is currently generating about -0.12 per unit of risk. If you would invest  139.00  in Dolphin Entertainment on January 30, 2024 and sell it today you would lose (18.00) from holding Dolphin Entertainment or give up 12.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Dolphin Entertainment  vs.  Urban One

Dolphin Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Urban One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urban One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Dolphin Entertainment and Urban One

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

The idea behind Dolphin Entertainment and Urban One 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.