Correlation Between Ambassador Hotel and Provision Information

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

By analyzing existing cross correlation between Ambassador Hotel and Provision Information CoLtd, you can compare the effects of market volatilities on Ambassador Hotel and Provision Information 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 Ambassador Hotel with a short position of Provision Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambassador Hotel and Provision Information.

Diversification Opportunities for Ambassador Hotel and Provision Information

0.61

Correlation Coefficient

Ambassador Hotel  Provision Information

Poor diversification

The 3 months correlation between Ambassador and Provision is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ambassador Hotel and Provision Information CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provision Information and Ambassador Hotel 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 Ambassador Hotel are associated (or correlated) with Provision Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provision Information has no effect on the direction of Ambassador Hotel i.e., Ambassador Hotel and Provision Information go up and down completely randomly.

Pair Corralation between Ambassador Hotel and Provision Information

Assuming the 90 days trading horizon Ambassador Hotel is expected to generate 1.04 times more return on investment than Provision Information. However, Ambassador Hotel is 1.04 times more volatile than Provision Information CoLtd. It trades about 0.02 of its potential returns per unit of risk. Provision Information CoLtd is currently generating about 0.02 per unit of risk. If you would invest  5,740  in Ambassador Hotel on September 5, 2024 and sell it today you would earn a total of  70.00  from holding Ambassador Hotel or generate 1.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ambassador Hotel  vs.  Provision Information CoLtd

Ambassador Hotel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ambassador Hotel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ambassador Hotel is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Provision Information

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Provision Information CoLtd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Provision Information is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ambassador Hotel and Provision Information

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

The idea behind Ambassador Hotel and Provision Information CoLtd 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.