Correlation Between FarGlory Hotel and Run Long
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Run Long 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 FarGlory Hotel and Run Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarGlory Hotel Co and Run Long Construction, you can compare the effects of market volatilities on FarGlory Hotel and Run Long 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 FarGlory Hotel with a short position of Run Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Run Long.
Diversification Opportunities for FarGlory Hotel and Run Long
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between FarGlory and Run is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Run Long Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Run Long Construction and FarGlory 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 FarGlory Hotel Co are associated (or correlated) with Run Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Run Long Construction has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Run Long go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Run Long
Assuming the 90 days trading horizon FarGlory Hotel is expected to generate 2.69 times less return on investment than Run Long. But when comparing it to its historical volatility, FarGlory Hotel Co is 1.76 times less risky than Run Long. It trades about 0.13 of its potential returns per unit of risk. Run Long Construction is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,655 in Run Long Construction on November 28, 2024 and sell it today you would earn a total of 160.00 from holding Run Long Construction or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Run Long Construction
Performance |
| Timeline |
| FarGlory Hotel |
| Run Long Construction |
FarGlory Hotel and Run Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Run Long
The main advantage of trading using opposite FarGlory Hotel and Run Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Run Long 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 Run Long will offset losses from the drop in Run Long's long position.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel Co |
| Run Long vs. Chang Type Industrial | Run Long vs. Anderson Industrial Corp | Run Long vs. Klingon Aerospace | Run Long vs. Basso Industry 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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