Correlation Between Avision and Ambassador Hotel
Can any of the company-specific risk be diversified away by investing in both Avision and Ambassador 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 Avision and Ambassador Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avision and Ambassador Hotel, you can compare the effects of market volatilities on Avision and Ambassador 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 Avision with a short position of Ambassador Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avision and Ambassador Hotel.
Diversification Opportunities for Avision and Ambassador Hotel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avision and Ambassador is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Avision and Ambassador Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambassador Hotel and Avision 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 Avision are associated (or correlated) with Ambassador Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambassador Hotel has no effect on the direction of Avision i.e., Avision and Ambassador Hotel go up and down completely randomly.
Pair Corralation between Avision and Ambassador Hotel
Assuming the 90 days trading horizon Avision is expected to under-perform the Ambassador Hotel. In addition to that, Avision is 1.68 times more volatile than Ambassador Hotel. It trades about -0.23 of its total potential returns per unit of risk. Ambassador Hotel is currently generating about -0.05 per unit of volatility. If you would invest 5,830 in Ambassador Hotel on September 1, 2024 and sell it today you would lose (180.00) from holding Ambassador Hotel or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avision vs. Ambassador Hotel
Performance |
| Timeline |
| Avision |
| Ambassador Hotel |
Avision and Ambassador Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avision and Ambassador Hotel
The main advantage of trading using opposite Avision and Ambassador Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avision position performs unexpectedly, Ambassador 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 Ambassador Hotel will offset losses from the drop in Ambassador Hotel's long position.| Avision vs. KYE Systems Corp | Avision vs. Clevo Co | Avision vs. Silicon Integrated Systems | Avision vs. Ability Enterprise Co |
| Ambassador Hotel vs. Chaintech Technology Corp | Ambassador Hotel vs. AVerMedia Technologies | Ambassador Hotel vs. Avision | Ambassador Hotel vs. Clevo Co |
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..
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