Correlation Between Computer and MIRAMAR HOTEL

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

By analyzing existing cross correlation between Computer And Technologies and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on Computer and MIRAMAR HOTEL 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 Computer with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer and MIRAMAR HOTEL.

Diversification Opportunities for Computer and MIRAMAR HOTEL

-0.24

Correlation Coefficient

Computer  MIRAMAR HOTEL

Very good diversification

The 3 months correlation between Computer and MIRAMAR is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Computer And Technologies and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV and Computer 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 Computer And Technologies are associated (or correlated) with MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of Computer i.e., Computer and MIRAMAR HOTEL go up and down completely randomly.

Pair Corralation between Computer and MIRAMAR HOTEL

Assuming the 90 days horizon Computer And Technologies is expected to under-perform the MIRAMAR HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, Computer And Technologies is 1.59 times less risky than MIRAMAR HOTEL. The stock trades about -0.1 of its potential returns per unit of risk. The MIRAMAR HOTEL INV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  89.00  in MIRAMAR HOTEL INV on September 24, 2024 and sell it today you would earn a total of  24.00  from holding MIRAMAR HOTEL INV or generate 26.97% return on investment over 90 days.

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

Computer And Technologies  vs.  MIRAMAR HOTEL INV

Computer And Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Computer And Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MIRAMAR HOTEL INV

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, MIRAMAR HOTEL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Computer and MIRAMAR HOTEL

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

The idea behind Computer And Technologies and MIRAMAR HOTEL INV 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.