Correlation Between Adolfo Dominguez and Atom Hoteles

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Adolfo Dominguez and Atom Hoteles 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 Adolfo Dominguez and Atom Hoteles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adolfo Dominguez SA and Atom Hoteles Socimi, you can compare the effects of market volatilities on Adolfo Dominguez and Atom Hoteles 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 Adolfo Dominguez with a short position of Atom Hoteles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adolfo Dominguez and Atom Hoteles.

Diversification Opportunities for Adolfo Dominguez and Atom Hoteles

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Adolfo and Atom is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Adolfo Dominguez SA and Atom Hoteles Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atom Hoteles Socimi and Adolfo Dominguez 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 Adolfo Dominguez SA are associated (or correlated) with Atom Hoteles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atom Hoteles Socimi has no effect on the direction of Adolfo Dominguez i.e., Adolfo Dominguez and Atom Hoteles go up and down completely randomly.

Pair Corralation between Adolfo Dominguez and Atom Hoteles

Assuming the 90 days trading horizon Adolfo Dominguez is expected to generate 12.5 times less return on investment than Atom Hoteles. But when comparing it to its historical volatility, Adolfo Dominguez SA is 3.51 times less risky than Atom Hoteles. It trades about 0.03 of its potential returns per unit of risk. Atom Hoteles Socimi is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  975.00  in Atom Hoteles Socimi on September 4, 2024 and sell it today you would earn a total of  405.00  from holding Atom Hoteles Socimi or generate 41.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Adolfo Dominguez SA  vs.  Atom Hoteles Socimi

 Performance 
       Timeline  
Adolfo Dominguez 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Adolfo Dominguez SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Adolfo Dominguez is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Atom Hoteles Socimi 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Atom Hoteles Socimi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Atom Hoteles exhibited solid returns over the last few months and may actually be approaching a breakup point.

Adolfo Dominguez and Atom Hoteles Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Adolfo Dominguez and Atom Hoteles

The main advantage of trading using opposite Adolfo Dominguez and Atom Hoteles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adolfo Dominguez position performs unexpectedly, Atom Hoteles 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 Atom Hoteles will offset losses from the drop in Atom Hoteles' long position.
The idea behind Adolfo Dominguez SA and Atom Hoteles Socimi 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.