Correlation Between DiamondRock Hospitality and KUAISHOU TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both DiamondRock Hospitality and KUAISHOU TECHNOLOGY 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 DiamondRock Hospitality and KUAISHOU TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiamondRock Hospitality and KUAISHOU TECHNOLOGY CLB, you can compare the effects of market volatilities on DiamondRock Hospitality and KUAISHOU TECHNOLOGY 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 DiamondRock Hospitality with a short position of KUAISHOU TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiamondRock Hospitality and KUAISHOU TECHNOLOGY.
Diversification Opportunities for DiamondRock Hospitality and KUAISHOU TECHNOLOGY
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between DiamondRock and KUAISHOU is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding DiamondRock Hospitality and KUAISHOU TECHNOLOGY CLB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KUAISHOU TECHNOLOGY CLB and DiamondRock 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 DiamondRock Hospitality are associated (or correlated) with KUAISHOU TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KUAISHOU TECHNOLOGY CLB has no effect on the direction of DiamondRock Hospitality i.e., DiamondRock Hospitality and KUAISHOU TECHNOLOGY go up and down completely randomly.
Pair Corralation between DiamondRock Hospitality and KUAISHOU TECHNOLOGY
Assuming the 90 days horizon DiamondRock Hospitality is expected to generate 1.18 times more return on investment than KUAISHOU TECHNOLOGY. However, DiamondRock Hospitality is 1.18 times more volatile than KUAISHOU TECHNOLOGY CLB. It trades about 0.06 of its potential returns per unit of risk. KUAISHOU TECHNOLOGY CLB is currently generating about 0.03 per unit of risk. If you would invest 802.00 in DiamondRock Hospitality on September 24, 2024 and sell it today you would earn a total of 88.00 from holding DiamondRock Hospitality or generate 10.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DiamondRock Hospitality vs. KUAISHOU TECHNOLOGY CLB
Performance |
Timeline |
DiamondRock Hospitality |
KUAISHOU TECHNOLOGY CLB |
DiamondRock Hospitality and KUAISHOU TECHNOLOGY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DiamondRock Hospitality and KUAISHOU TECHNOLOGY
The main advantage of trading using opposite DiamondRock Hospitality and KUAISHOU TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiamondRock Hospitality position performs unexpectedly, KUAISHOU TECHNOLOGY 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 KUAISHOU TECHNOLOGY will offset losses from the drop in KUAISHOU TECHNOLOGY's long position.DiamondRock Hospitality vs. FOUR NERS PROPERTY | DiamondRock Hospitality vs. BRAEMAR HOTELS RES | DiamondRock Hospitality vs. Sotherly Hotels |
KUAISHOU TECHNOLOGY vs. TRAVEL LEISURE DL 01 | KUAISHOU TECHNOLOGY vs. DiamondRock Hospitality | KUAISHOU TECHNOLOGY vs. ATRYS HEALTH SA | KUAISHOU TECHNOLOGY vs. EPSILON HEALTHCARE LTD |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |