Correlation Between American Tower and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both American Tower and PPHE Hotel 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 American Tower and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Tower REIT and PPHE Hotel Group, you can compare the effects of market volatilities on American Tower and PPHE Hotel 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 American Tower with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Tower and PPHE Hotel.
Diversification Opportunities for American Tower and PPHE Hotel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and PPHE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding American Tower REIT and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group and American Tower 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 American Tower REIT are associated (or correlated) with PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of American Tower i.e., American Tower and PPHE Hotel go up and down completely randomly.
Pair Corralation between American Tower and PPHE Hotel
Assuming the 90 days trading horizon American Tower REIT is expected to generate 0.98 times more return on investment than PPHE Hotel. However, American Tower REIT is 1.02 times less risky than PPHE Hotel. It trades about 0.02 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.0 per unit of risk. If you would invest 19,904 in American Tower REIT on September 4, 2024 and sell it today you would earn a total of 944.00 from holding American Tower REIT or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
American Tower REIT vs. PPHE Hotel Group
Performance |
| Timeline |
| American Tower REIT |
| PPHE Hotel Group |
American Tower and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Tower and PPHE Hotel
The main advantage of trading using opposite American Tower and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Tower position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| American Tower vs. PPHE Hotel Group | American Tower vs. Summit Materials Cl | American Tower vs. Spirent Communications plc | American Tower vs. Martin Marietta Materials |
| PPHE Hotel vs. BYD Co | PPHE Hotel vs. Volkswagen AG | PPHE Hotel vs. Volkswagen AG Non Vtg | PPHE Hotel vs. Compass Group PLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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