Correlation Between Sycamore Entmt and MSCI ACWI

Can any of the company-specific risk be diversified away by investing in both Sycamore Entmt and MSCI ACWI 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 Sycamore Entmt and MSCI ACWI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sycamore Entmt Grp and MSCI ACWI exAUCONSUMER, you can compare the effects of market volatilities on Sycamore Entmt and MSCI ACWI 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 Sycamore Entmt with a short position of MSCI ACWI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and MSCI ACWI.

Diversification Opportunities for Sycamore Entmt and MSCI ACWI

0.75

Correlation Coefficient

Sycamore Entmt  MSCI ACWI

Poor diversification

The 3 months correlation between Sycamore and MSCI is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and MSCI ACWI exAUCONSUMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI ACWI exAUCONSUMER and Sycamore Entmt 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 Sycamore Entmt Grp are associated (or correlated) with MSCI ACWI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI ACWI exAUCONSUMER has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and MSCI ACWI go up and down completely randomly.

Pair Corralation between Sycamore Entmt and MSCI ACWI

Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 78.32 times more return on investment than MSCI ACWI. However, Sycamore Entmt is 78.32 times more volatile than MSCI ACWI exAUCONSUMER. It trades about 0.17 of its potential returns per unit of risk. MSCI ACWI exAUCONSUMER is currently generating about 0.21 per unit of risk. If you would invest  0.06  in Sycamore Entmt Grp on September 4, 2024 and sell it today you would earn a total of  0.10  from holding Sycamore Entmt Grp or generate 166.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Sycamore Entmt Grp  vs.  MSCI ACWI exAUCONSUMER

Sycamore Entmt Grp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MSCI ACWI exAUCONSUMER

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI ACWI exAUCONSUMER are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, MSCI ACWI is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sycamore Entmt and MSCI ACWI

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

The idea behind Sycamore Entmt Grp and MSCI ACWI exAUCONSUMER 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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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..