Correlation Between Disney and Bar Harbor

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Can any of the company-specific risk be diversified away by investing in both Disney and Bar Harbor 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 Disney and Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Bar Harbor Bankshares, you can compare the effects of market volatilities on Disney and Bar Harbor 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 Disney with a short position of Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Bar Harbor.

Diversification Opportunities for Disney and Bar Harbor

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Disney and Bar Harbor is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and Disney 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 Walt Disney are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Disney i.e., Disney and Bar Harbor go up and down completely randomly.

Pair Corralation between Disney and Bar Harbor

Considering the 90-day investment horizon Walt Disney is expected to under-perform the Bar Harbor. But the stock apears to be less risky and, when comparing its historical volatility, Walt Disney is 1.02 times less risky than Bar Harbor. The stock trades about -0.04 of its potential returns per unit of risk. The Bar Harbor Bankshares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,281  in Bar Harbor Bankshares on September 1, 2022 and sell it today you would earn a total of  746.00  from holding Bar Harbor Bankshares or generate 32.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Walt Disney  vs.  Bar Harbor Bankshares

 Performance (%) 
       Timeline  
Walt Disney 
Disney Performance
0 of 100
Over the last 90 days Walt Disney has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in December 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Disney Price Channel

Bar Harbor Bankshares 
Bar Harbor Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bar Harbor Bankshares are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, Bar Harbor may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Bar Harbor Price Channel

Disney and Bar Harbor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Disney and Bar Harbor

The main advantage of trading using opposite Disney and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.
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The idea behind Walt Disney and Bar Harbor Bankshares 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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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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