Correlation Between Grande Hospitality and Symphony Communication

Can any of the company-specific risk be diversified away by investing in both Grande Hospitality and Symphony Communication 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 Symphony Communication 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 Symphony Communication Public, you can compare the effects of market volatilities on Grande Hospitality and Symphony Communication 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 Symphony Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Hospitality and Symphony Communication.

Diversification Opportunities for Grande Hospitality and Symphony Communication

-0.62

Correlation Coefficient

Grande Hospitality  Symphony Communication

Excellent diversification

The 3 months correlation between Grande and Symphony is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grande Hospitality Real and Symphony Communication Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Communication 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 Symphony Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Communication has no effect on the direction of Grande Hospitality i.e., Grande Hospitality and Symphony Communication go up and down completely randomly.

Pair Corralation between Grande Hospitality and Symphony Communication

Assuming the 90 days trading horizon Grande Hospitality is expected to generate 3.87 times less return on investment than Symphony Communication. But when comparing it to its historical volatility, Grande Hospitality Real is 2.51 times less risky than Symphony Communication. It trades about 0.04 of its potential returns per unit of risk. Symphony Communication Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  765.00  in Symphony Communication Public on September 16, 2024 and sell it today you would earn a total of  60.00  from holding Symphony Communication Public or generate 7.84% return on investment over 90 days.

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

Grande Hospitality Real  vs.  Symphony Communication Public

Grande Hospitality Real

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grande Hospitality Real are ranked lower than 2 (%) 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.

Symphony Communication

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Symphony Communication Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Symphony Communication may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Grande Hospitality and Symphony Communication

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

The idea behind Grande Hospitality Real and Symphony Communication 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..