Correlation Between Disney and DISH Network
Can any of the company-specific risk be diversified away by investing in both Disney and DISH Network 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 DISH Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and DISH Network, you can compare the effects of market volatilities on Disney and DISH Network 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 DISH Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and DISH Network.
Diversification Opportunities for Disney and DISH Network
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Disney and DISH is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and DISH Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISH Network 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 DISH Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISH Network has no effect on the direction of Disney i.e., Disney and DISH Network go up and down completely randomly.
Pair Corralation between Disney and DISH Network
Considering the 90-day investment horizon Walt Disney is expected to generate 0.46 times more return on investment than DISH Network. However, Walt Disney is 2.18 times less risky than DISH Network. It trades about 0.03 of its potential returns per unit of risk. DISH Network is currently generating about -0.05 per unit of risk. If you would invest 9,561 in Walt Disney on January 19, 2024 and sell it today you would earn a total of 1,733 from holding Walt Disney or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.74% |
| Values | Daily Returns |
Walt Disney vs. DISH Network
Performance |
| Timeline |
| Walt Disney |
| DISH Network |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Disney and DISH Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and DISH Network
The main advantage of trading using opposite Disney and DISH Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, DISH Network 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 DISH Network will offset losses from the drop in DISH Network's long position.| Disney vs. Roku Inc | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery | Disney vs. Paramount Global Class |
| DISH Network vs. Verizon Communications | DISH Network vs. ATT Inc | DISH Network vs. Comcast Corp | DISH Network vs. Charter Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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