Correlation Between Dan Hotels and Amir Marketing

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

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

Diversification Opportunities for Dan Hotels and Amir Marketing

-0.56

Correlation Coefficient

Dan Hotels  Amir Marketing

Excellent diversification

The 3 months correlation between Dan and Amir is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Amir Marketing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amir Marketing and Dan Hotels 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 Dan Hotels are associated (or correlated) with Amir Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amir Marketing has no effect on the direction of Dan Hotels i.e., Dan Hotels and Amir Marketing go up and down completely randomly.

Pair Corralation between Dan Hotels and Amir Marketing

Assuming the 90 days trading horizon Dan Hotels is expected to generate 8.36 times less return on investment than Amir Marketing. But when comparing it to its historical volatility, Dan Hotels is 1.34 times less risky than Amir Marketing. It trades about 0.01 of its potential returns per unit of risk. Amir Marketing and is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  250,100  in Amir Marketing and on September 29, 2024 and sell it today you would earn a total of  44,200  from holding Amir Marketing and or generate 17.67% return on investment over 90 days.

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

Dan Hotels  vs.  Amir Marketing and

Dan Hotels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dan Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Amir Marketing

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amir Marketing and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amir Marketing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dan Hotels and Amir Marketing

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

The idea behind Dan Hotels and Amir Marketing and 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.