Correlation Between Grande Hospitality and Ichitan Group

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

By analyzing existing cross correlation between Grande Hospitality Real and Ichitan Group Public, you can compare the effects of market volatilities on Grande Hospitality and Ichitan Group 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 Grande Hospitality with a short position of Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Hospitality and Ichitan Group.

Diversification Opportunities for Grande Hospitality and Ichitan Group

0.63

Correlation Coefficient

Grande Hospitality  Ichitan Group

Poor diversification

The 3 months correlation between Grande and Ichitan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Grande Hospitality Real and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group Public and Grande Hospitality 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 Grande Hospitality Real are associated (or correlated) with Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of Grande Hospitality i.e., Grande Hospitality and Ichitan Group go up and down completely randomly.

Pair Corralation between Grande Hospitality and Ichitan Group

Assuming the 90 days trading horizon Grande Hospitality Real is expected to generate 0.75 times more return on investment than Ichitan Group. However, Grande Hospitality Real is 1.33 times less risky than Ichitan Group. It trades about 0.19 of its potential returns per unit of risk. Ichitan Group Public is currently generating about -0.18 per unit of risk. If you would invest  660.00  in Grande Hospitality Real on September 12, 2024 and sell it today you would earn a total of  30.00  from holding Grande Hospitality Real or generate 4.55% return on investment over 90 days.

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

Grande Hospitality Real  vs.  Ichitan Group Public

Grande Hospitality Real

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grande Hospitality Real are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grande Hospitality is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Ichitan Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichitan Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ichitan Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Grande Hospitality and Ichitan Group

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

The idea behind Grande Hospitality Real and Ichitan Group Public 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.