Correlation Between Hotel Property and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Regal Investment 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 Regal Investment 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 Regal Investment, you can compare the effects of market volatilities on Hotel Property and Regal Investment 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 Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Regal Investment.
Diversification Opportunities for Hotel Property and Regal Investment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hotel and Regal is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment 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 Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of Hotel Property i.e., Hotel Property and Regal Investment go up and down completely randomly.
Pair Corralation between Hotel Property and Regal Investment
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 1.03 times more return on investment than Regal Investment. However, Hotel Property is 1.03 times more volatile than Regal Investment. It trades about 0.11 of its potential returns per unit of risk. Regal Investment is currently generating about 0.07 per unit of risk. If you would invest 341.00 in Hotel Property Investments on September 5, 2024 and sell it today you would earn a total of 32.00 from holding Hotel Property Investments or generate 9.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hotel Property Investments vs. Regal Investment
Performance |
Timeline |
Hotel Property Inves |
Regal Investment |
Hotel Property and Regal Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hotel Property and Regal Investment
The main advantage of trading using opposite Hotel Property and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Regal Investment 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 Regal Investment will offset losses from the drop in Regal Investment's long position.Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Carindale Property Trust |
Regal Investment vs. ABACUS STORAGE KING | Regal Investment vs. Odyssey Energy | Regal Investment vs. JB Hi Fi | Regal Investment vs. Sims |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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