Correlation Between Ambassador Hotel and Chang Type
Can any of the company-specific risk be diversified away by investing in both Ambassador Hotel and Chang Type 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 Ambassador Hotel and Chang Type into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambassador Hotel and Chang Type Industrial, you can compare the effects of market volatilities on Ambassador Hotel and Chang Type 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 Ambassador Hotel with a short position of Chang Type. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambassador Hotel and Chang Type.
Diversification Opportunities for Ambassador Hotel and Chang Type
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ambassador and Chang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ambassador Hotel and Chang Type Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chang Type Industrial and Ambassador Hotel 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 Ambassador Hotel are associated (or correlated) with Chang Type. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chang Type Industrial has no effect on the direction of Ambassador Hotel i.e., Ambassador Hotel and Chang Type go up and down completely randomly.
Pair Corralation between Ambassador Hotel and Chang Type
Assuming the 90 days trading horizon Ambassador Hotel is expected to generate 1.59 times more return on investment than Chang Type. However, Ambassador Hotel is 1.59 times more volatile than Chang Type Industrial. It trades about 0.03 of its potential returns per unit of risk. Chang Type Industrial is currently generating about -0.09 per unit of risk. If you would invest 5,680 in Ambassador Hotel on September 14, 2024 and sell it today you would earn a total of 40.00 from holding Ambassador Hotel or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambassador Hotel vs. Chang Type Industrial
Performance |
| Timeline |
| Ambassador Hotel |
| Chang Type Industrial |
Ambassador Hotel and Chang Type Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambassador Hotel and Chang Type
The main advantage of trading using opposite Ambassador Hotel and Chang Type positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambassador Hotel position performs unexpectedly, Chang Type 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 Chang Type will offset losses from the drop in Chang Type's long position.| Ambassador Hotel vs. Feng Tay Enterprises | Ambassador Hotel vs. Ruentex Development Co | Ambassador Hotel vs. WiseChip Semiconductor | Ambassador Hotel vs. Novatek Microelectronics Corp |
| Chang Type vs. Sunfar Computer Co | Chang Type vs. Ambassador Hotel | Chang Type vs. Arima Communications Corp | Chang Type vs. U Media Communications |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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