Correlation Between Hotel Holiday and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both Hotel Holiday and Camellia Metal 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 Hotel Holiday and Camellia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Holiday Garden and Camellia Metal Co, you can compare the effects of market volatilities on Hotel Holiday and Camellia Metal 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 Hotel Holiday with a short position of Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Holiday and Camellia Metal.
Diversification Opportunities for Hotel Holiday and Camellia Metal
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hotel and Camellia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Holiday Garden and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and Hotel Holiday 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 Hotel Holiday Garden are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Hotel Holiday i.e., Hotel Holiday and Camellia Metal go up and down completely randomly.
Pair Corralation between Hotel Holiday and Camellia Metal
Assuming the 90 days trading horizon Hotel Holiday Garden is expected to under-perform the Camellia Metal. In addition to that, Hotel Holiday is 1.01 times more volatile than Camellia Metal Co. It trades about -0.07 of its total potential returns per unit of risk. Camellia Metal Co is currently generating about -0.02 per unit of volatility. If you would invest 1,690 in Camellia Metal Co on September 2, 2024 and sell it today you would lose (205.00) from holding Camellia Metal Co or give up 12.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Holiday Garden vs. Camellia Metal Co
Performance |
| Timeline |
| Hotel Holiday Garden |
| Camellia Metal |
Hotel Holiday and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Holiday and Camellia Metal
The main advantage of trading using opposite Hotel Holiday and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Holiday position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| Hotel Holiday vs. First Hotel Co | Hotel Holiday vs. Leofoo Development Co | Hotel Holiday vs. Taiwan Tea Corp | Hotel Holiday vs. China Container Terminal |
| Camellia Metal vs. Yang Ming Marine | Camellia Metal vs. Wan Hai Lines | Camellia Metal vs. Hsin Kuang Steel | Camellia Metal vs. Evergreen Marine Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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