Correlation Between Feat Fund and Dan Hotels
Can any of the company-specific risk be diversified away by investing in both Feat Fund and Dan Hotels 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 Feat Fund and Dan Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feat Fund Investments and Dan Hotels, you can compare the effects of market volatilities on Feat Fund and Dan Hotels 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 Feat Fund with a short position of Dan Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feat Fund and Dan Hotels.
Diversification Opportunities for Feat Fund and Dan Hotels
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Feat and Dan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Feat Fund Investments and Dan Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dan Hotels and Feat Fund 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 Feat Fund Investments are associated (or correlated) with Dan Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dan Hotels has no effect on the direction of Feat Fund i.e., Feat Fund and Dan Hotels go up and down completely randomly.
Pair Corralation between Feat Fund and Dan Hotels
Assuming the 90 days trading horizon Feat Fund Investments is expected to generate 0.55 times more return on investment than Dan Hotels. However, Feat Fund Investments is 1.83 times less risky than Dan Hotels. It trades about -0.04 of its potential returns per unit of risk. Dan Hotels is currently generating about -0.08 per unit of risk. If you would invest 12,920 in Feat Fund Investments on September 21, 2024 and sell it today you would lose (300.00) from holding Feat Fund Investments or give up 2.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Feat Fund Investments vs. Dan Hotels
Performance |
Timeline |
Feat Fund Investments |
Dan Hotels |
Feat Fund and Dan Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Feat Fund and Dan Hotels
The main advantage of trading using opposite Feat Fund and Dan Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feat Fund position performs unexpectedly, Dan Hotels 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 Dan Hotels will offset losses from the drop in Dan Hotels' long position.Feat Fund vs. Nice | Feat Fund vs. The Gold Bond | Feat Fund vs. Bank Leumi Le Israel | Feat Fund vs. ICL Israel Chemicals |
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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.
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