Correlation Between DALATA HOTEL and GREENX METALS

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

By analyzing existing cross correlation between DALATA HOTEL and GREENX METALS LTD, you can compare the effects of market volatilities on DALATA HOTEL and GREENX METALS 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 DALATA HOTEL with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DALATA HOTEL and GREENX METALS.

Diversification Opportunities for DALATA HOTEL and GREENX METALS

-0.55

Correlation Coefficient

DALATA HOTEL  GREENX METALS

Excellent diversification

The 3 months correlation between DALATA and GREENX is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and DALATA 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 DALATA HOTEL are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of DALATA HOTEL i.e., DALATA HOTEL and GREENX METALS go up and down completely randomly.

Pair Corralation between DALATA HOTEL and GREENX METALS

Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 0.69 times more return on investment than GREENX METALS. However, DALATA HOTEL is 1.45 times less risky than GREENX METALS. It trades about 0.1 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.02 per unit of risk. If you would invest  367.00  in DALATA HOTEL on September 26, 2024 and sell it today you would earn a total of  74.00  from holding DALATA HOTEL or generate 20.16% return on investment over 90 days.

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

DALATA HOTEL  vs.  GREENX METALS LTD

DALATA HOTEL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DALATA HOTEL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, DALATA HOTEL unveiled solid returns over the last few months and may actually be approaching a breakup point.

GREENX METALS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREENX METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, GREENX METALS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DALATA HOTEL and GREENX METALS

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

The idea behind DALATA HOTEL and GREENX METALS LTD 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.