Correlation Between Disney and Dolphin Entertainment

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

Diversification Opportunities for Disney and Dolphin Entertainment

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Disney and Dolphin is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment 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 Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Disney i.e., Disney and Dolphin Entertainment go up and down completely randomly.

Pair Corralation between Disney and Dolphin Entertainment

Considering the 90-day investment horizon Walt Disney is expected to under-perform the Dolphin Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Walt Disney is 3.31 times less risky than Dolphin Entertainment. The stock trades about -0.11 of its potential returns per unit of risk. The Dolphin Entertainment is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  957.00  in Dolphin Entertainment on April 6, 2022 and sell it today you would lose (600.00)  from holding Dolphin Entertainment or give up 62.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Walt Disney  vs.  Dolphin Entertainment

 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 weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in August 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Disney Price Channel

Dolphin Entertainment 
Dolphin Performance
0 of 100
Over the last 90 days Dolphin Entertainment 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 basic indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Structure and Payout Changes

Last Split Factor
1:5
Dividend Date
2020-11-27
Last Split Date
2020-11-27

Dolphin Price Channel

Disney and Dolphin Entertainment Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Disney and Dolphin Entertainment

The main advantage of trading using opposite Disney and Dolphin Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, Dolphin Entertainment 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 Dolphin Entertainment will offset losses from the drop in Dolphin Entertainment's long position.
The idea behind Walt Disney and Dolphin Entertainment 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.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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