Correlation Between Focus Home and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Focus Home and Dalata 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 Focus Home and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and Dalata Hotel Group, you can compare the effects of market volatilities on Focus Home and Dalata 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 Focus Home with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and Dalata Hotel.
Diversification Opportunities for Focus Home and Dalata Hotel
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and Dalata is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and Focus Home 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 Focus Home Interactive are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Focus Home i.e., Focus Home and Dalata Hotel go up and down completely randomly.
Pair Corralation between Focus Home and Dalata Hotel
Assuming the 90 days horizon Focus Home Interactive is expected to generate 2.2 times more return on investment than Dalata Hotel. However, Focus Home is 2.2 times more volatile than Dalata Hotel Group. It trades about 0.04 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about -0.1 per unit of risk. If you would invest 2,085 in Focus Home Interactive on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Focus Home Interactive or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. Dalata Hotel Group
Performance |
| Timeline |
| Focus Home Interactive |
| Dalata Hotel Group |
Focus Home and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and Dalata Hotel
The main advantage of trading using opposite Focus Home and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, Dalata 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Focus Home vs. NEXON Co | Focus Home vs. Take Two Interactive Software | Focus Home vs. Superior Plus Corp | Focus Home vs. SIVERS SEMICONDUCTORS AB |
| Dalata Hotel vs. Columbia Sportswear | Dalata Hotel vs. Transportadora de Gas | Dalata Hotel vs. Q2M Managementberatung AG | Dalata Hotel vs. AGF Management Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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