Correlation Between Atlanta Braves and Warner Bros

Can any of the company-specific risk be diversified away by investing in both Atlanta Braves and Warner Bros 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 Atlanta Braves and Warner Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlanta Braves Holdings, and Warner Bros Discovery, you can compare the effects of market volatilities on Atlanta Braves and Warner Bros 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 Atlanta Braves with a short position of Warner Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanta Braves and Warner Bros.

Diversification Opportunities for Atlanta Braves and Warner Bros

-0.53

Correlation Coefficient

Atlanta Braves  Warner Bros

Excellent diversification

The 3 months correlation between Atlanta and Warner is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Atlanta Braves Holdings, and Warner Bros Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Bros Discovery and Atlanta Braves 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 Atlanta Braves Holdings, are associated (or correlated) with Warner Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Bros Discovery has no effect on the direction of Atlanta Braves i.e., Atlanta Braves and Warner Bros go up and down completely randomly.

Pair Corralation between Atlanta Braves and Warner Bros

Assuming the 90 days horizon Atlanta Braves Holdings, is expected to generate 0.43 times more return on investment than Warner Bros. However, Atlanta Braves Holdings, is 2.34 times less risky than Warner Bros. It trades about 0.03 of its potential returns per unit of risk. Warner Bros Discovery is currently generating about 0.01 per unit of risk. If you would invest  3,411  in Atlanta Braves Holdings, on September 29, 2024 and sell it today you would earn a total of  616.00  from holding Atlanta Braves Holdings, or generate 18.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Atlanta Braves Holdings,  vs.  Warner Bros Discovery

Atlanta Braves Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Atlanta Braves is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Warner Bros Discovery

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Warner Bros Discovery are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental drivers, Warner Bros exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlanta Braves and Warner Bros

The main advantage of trading using opposite Atlanta Braves and Warner Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanta Braves position performs unexpectedly, Warner Bros 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 Warner Bros will offset losses from the drop in Warner Bros' long position.

The idea behind Atlanta Braves Holdings, and Warner Bros Discovery 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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.