Correlation Between Disney and Coinbase Global

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

Diversification Opportunities for Disney and Coinbase Global

  Correlation Coefficient

Poor diversification

The 3 months correlation between Disney and Coinbase is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Coinbase Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Global 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 Coinbase Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Global has no effect on the direction of Disney i.e., Disney and Coinbase Global go up and down completely randomly.

Pair Corralation between Disney and Coinbase Global

Considering the 90-day investment horizon Walt Disney is expected to generate 0.54 times more return on investment than Coinbase Global. However, Walt Disney is 1.84 times less risky than Coinbase Global. It trades about 0.02 of its potential returns per unit of risk. Coinbase Global is currently generating about -0.11 per unit of risk. If you would invest  9,958  in Walt Disney on September 5, 2022 and sell it today you would lose (15.00)  from holding Walt Disney or give up 0.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Walt Disney  vs.  Coinbase Global

 Performance (%) 
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 latest weak performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Disney Price Channel

Coinbase Global 
Coinbase Performance
0 of 100
Over the last 90 days Coinbase Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Coinbase Price Channel

Disney and Coinbase Global Volatility Contrast

   Predicted Return Density   

Pair Trading with Disney and Coinbase Global

The main advantage of trading using opposite Disney and Coinbase Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Coinbase Global 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 Coinbase Global will offset losses from the drop in Coinbase Global's long position.
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The idea behind Walt Disney and Coinbase Global 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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