Correlation Between Santacruz Silver and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Santacruz Silver and Choice Hotels 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 Santacruz Silver and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santacruz Silver Mining and Choice Hotels International, you can compare the effects of market volatilities on Santacruz Silver and Choice Hotels 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 Santacruz Silver with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santacruz Silver and Choice Hotels.
Diversification Opportunities for Santacruz Silver and Choice Hotels
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Santacruz and Choice is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Santacruz Silver Mining and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and Santacruz Silver 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 Santacruz Silver Mining are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of Santacruz Silver i.e., Santacruz Silver and Choice Hotels go up and down completely randomly.
Pair Corralation between Santacruz Silver and Choice Hotels
Assuming the 90 days horizon Santacruz Silver Mining is expected to under-perform the Choice Hotels. In addition to that, Santacruz Silver is 5.88 times more volatile than Choice Hotels International. It trades about -0.08 of its total potential returns per unit of risk. Choice Hotels International is currently generating about 0.07 per unit of volatility. If you would invest 12,900 in Choice Hotels International on September 27, 2024 and sell it today you would earn a total of 500.00 from holding Choice Hotels International or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santacruz Silver Mining vs. Choice Hotels International
Performance |
| Timeline |
| Santacruz Silver Mining |
| Choice Hotels Intern |
Santacruz Silver and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santacruz Silver and Choice Hotels
The main advantage of trading using opposite Santacruz Silver and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santacruz Silver position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| Santacruz Silver vs. Choice Hotels International | Santacruz Silver vs. GREENX METALS LTD | Santacruz Silver vs. Playtech plc | Santacruz Silver vs. Axcelis Technologies |
| Choice Hotels vs. DAIRY FARM INTL | Choice Hotels vs. ALERION CLEANPOWER | Choice Hotels vs. QINGCI GAMES INC | Choice Hotels vs. EAST SIDE GAMES |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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