Correlation Between WSP Global and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both WSP Global and COVIVIO 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 WSP Global and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WSP Global and COVIVIO HOTELS INH, you can compare the effects of market volatilities on WSP Global and COVIVIO 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 WSP Global with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WSP Global and COVIVIO HOTELS.
Diversification Opportunities for WSP Global and COVIVIO HOTELS
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between WSP and COVIVIO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding WSP Global and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH and WSP Global 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 WSP Global are associated (or correlated) with COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of WSP Global i.e., WSP Global and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between WSP Global and COVIVIO HOTELS
Assuming the 90 days horizon WSP Global is expected to generate 1.35 times more return on investment than COVIVIO HOTELS. However, WSP Global is 1.35 times more volatile than COVIVIO HOTELS INH. It trades about 0.1 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about -0.04 per unit of risk. If you would invest 15,800 in WSP Global on September 3, 2024 and sell it today you would earn a total of 700.00 from holding WSP Global or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WSP Global vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| WSP Global |
| COVIVIO HOTELS INH |
WSP Global and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WSP Global and COVIVIO HOTELS
The main advantage of trading using opposite WSP Global and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WSP Global position performs unexpectedly, COVIVIO 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| WSP Global vs. Larsen Toubro Limited | WSP Global vs. China Railway Group | WSP Global vs. China Communications Construction | WSP Global vs. Superior Plus Corp |
| COVIVIO HOTELS vs. InterContinental Hotels Group | COVIVIO HOTELS vs. MELIA HOTELS | COVIVIO HOTELS vs. GRUPO CARSO A1 | COVIVIO HOTELS vs. INTERCONT HOTELS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |