Correlation Between CAVELL TOURISTIC and NEW MAURITIUS

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

By analyzing existing cross correlation between CAVELL TOURISTIC INVESTMENTS and NEW MAURITIUS HOTELS, you can compare the effects of market volatilities on CAVELL TOURISTIC and NEW MAURITIUS 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 CAVELL TOURISTIC with a short position of NEW MAURITIUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVELL TOURISTIC and NEW MAURITIUS.

Diversification Opportunities for CAVELL TOURISTIC and NEW MAURITIUS

-0.5

Correlation Coefficient

CAVELL TOURISTIC  NEW MAURITIUS

Very good diversification

The 3 months correlation between CAVELL and NEW is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding CAVELL TOURISTIC INVESTMENTS and NEW MAURITIUS HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MAURITIUS HOTELS and CAVELL TOURISTIC 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 CAVELL TOURISTIC INVESTMENTS are associated (or correlated) with NEW MAURITIUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MAURITIUS HOTELS has no effect on the direction of CAVELL TOURISTIC i.e., CAVELL TOURISTIC and NEW MAURITIUS go up and down completely randomly.

Pair Corralation between CAVELL TOURISTIC and NEW MAURITIUS

Assuming the 90 days trading horizon CAVELL TOURISTIC INVESTMENTS is expected to under-perform the NEW MAURITIUS. In addition to that, CAVELL TOURISTIC is 2.14 times more volatile than NEW MAURITIUS HOTELS. It trades about -0.18 of its total potential returns per unit of risk. NEW MAURITIUS HOTELS is currently generating about 0.08 per unit of volatility. If you would invest  1,310  in NEW MAURITIUS HOTELS on September 13, 2024 and sell it today you would earn a total of  95.00  from holding NEW MAURITIUS HOTELS or generate 7.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

CAVELL TOURISTIC INVESTMENTS  vs.  NEW MAURITIUS HOTELS

CAVELL TOURISTIC INV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAVELL TOURISTIC INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NEW MAURITIUS HOTELS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NEW MAURITIUS HOTELS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady essential indicators, NEW MAURITIUS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CAVELL TOURISTIC and NEW MAURITIUS

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

The idea behind CAVELL TOURISTIC INVESTMENTS and NEW MAURITIUS HOTELS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.