Correlation Between Sycamore Entmt and Via Renewables

Can any of the company-specific risk be diversified away by investing in both Sycamore Entmt and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Sycamore Entmt and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and Via Renewables.

Diversification Opportunities for Sycamore Entmt and Via Renewables

0.65

Correlation Coefficient

Sycamore Entmt  Via Renewables

Poor diversification

The 3 months correlation between Sycamore and Via is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and Via Renewables go up and down completely randomly.

Pair Corralation between Sycamore Entmt and Via Renewables

Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 12.14 times more return on investment than Via Renewables. However, Sycamore Entmt is 12.14 times more volatile than Via Renewables. It trades about 0.16 of its potential returns per unit of risk. Via Renewables is currently generating about 0.08 per unit of risk. If you would invest  0.08  in Sycamore Entmt Grp on September 2, 2024 and sell it today you would earn a total of  0.10  from holding Sycamore Entmt Grp or generate 125.0% 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.  Via Renewables

Sycamore Entmt Grp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 12 (%) 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.

Via Renewables

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Via Renewables is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sycamore Entmt and Via Renewables

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

The idea behind Sycamore Entmt Grp and Via Renewables 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.