Correlation Between DISH Network and Disney

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

By analyzing existing cross correlation between DISH Network and Walt Disney, you can compare the effects of market volatilities on DISH Network and Disney 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 DISH Network with a short position of Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of DISH Network and Disney.

Diversification Opportunities for DISH Network and Disney

-0.55

Correlation Coefficient

DISH Network  Disney

Excellent diversification

The 3 months correlation between DISH and Disney is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding DISH Network and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and DISH Network 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 DISH Network are associated (or correlated) with Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of DISH Network i.e., DISH Network and Disney go up and down completely randomly.

Pair Corralation between DISH Network and Disney

If you would invest  9,486  in Walt Disney on January 25, 2024 and sell it today you would earn a total of  1,885  from holding Walt Disney or generate 19.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

DISH Network  vs.  Walt Disney

DISH Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DISH Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, DISH Network is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Walt Disney

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DISH Network and Disney

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

The idea behind DISH Network and Walt Disney 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.