Correlation Between Hotel Property and Global Data
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Global Data 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 Hotel Property and Global Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Property Investments and Global Data Centre, you can compare the effects of market volatilities on Hotel Property and Global Data 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 Hotel Property with a short position of Global Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Global Data.
Diversification Opportunities for Hotel Property and Global Data
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hotel and Global is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Global Data Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Data Centre and Hotel Property 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 Hotel Property Investments are associated (or correlated) with Global Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Data Centre has no effect on the direction of Hotel Property i.e., Hotel Property and Global Data go up and down completely randomly.
Pair Corralation between Hotel Property and Global Data
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.22 times more return on investment than Global Data. However, Hotel Property Investments is 4.46 times less risky than Global Data. It trades about 0.05 of its potential returns per unit of risk. Global Data Centre is currently generating about -0.11 per unit of risk. If you would invest 365.00 in Hotel Property Investments on September 26, 2024 and sell it today you would earn a total of 13.00 from holding Hotel Property Investments or generate 3.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hotel Property Investments vs. Global Data Centre
Performance |
Timeline |
Hotel Property Inves |
Global Data Centre |
Hotel Property and Global Data Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hotel Property and Global Data
The main advantage of trading using opposite Hotel Property and Global Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Global Data 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 Global Data will offset losses from the drop in Global Data's long position.Hotel Property vs. Medibank Private | Hotel Property vs. G8 Education | Hotel Property vs. Bell Financial Group | Hotel Property vs. MotorCycle Holdings |
Global Data vs. Mount Gibson Iron | Global Data vs. Iron Road | Global Data vs. MFF Capital Investments | Global Data vs. Hotel Property Investments |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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