Correlation Between Imagination and Disney
Can any of the company-specific risk be diversified away by investing in both Imagination 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 Imagination and Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imagination TV and Walt Disney, you can compare the effects of market volatilities on Imagination 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 Imagination with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imagination and Disney.
Diversification Opportunities for Imagination and Disney
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Imagination and Disney is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Imagination TV and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Imagination 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 Imagination TV 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 Imagination i.e., Imagination and Disney go up and down completely randomly.
Pair Corralation between Imagination and Disney
Given the investment horizon of 90 days Imagination TV is expected to generate 35.66 times more return on investment than Disney. However, Imagination is 35.66 times more volatile than Walt Disney. It trades about 0.07 of its potential returns per unit of risk. Walt Disney is currently generating about 0.01 per unit of risk. If you would invest 0.00 in Imagination TV on January 20, 2024 and sell it today you would earn a total of 0.01 from holding Imagination TV or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 39.68% |
Values | Daily Returns |
Imagination TV vs. Walt Disney
Performance |
Timeline |
Imagination TV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walt Disney |
Imagination and Disney Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Imagination and Disney
The main advantage of trading using opposite Imagination and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imagination 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.Imagination vs. Walt Disney | Imagination vs. Roku Inc | Imagination vs. AMC Entertainment Holdings | Imagination vs. Paramount Global Class |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Equity Valuation Check real value of public entities based on technical and fundamental data |