Correlation Between FarGlory Hotel and Chateau International
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Chateau International 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 Chateau International 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 Chateau International Development, you can compare the effects of market volatilities on FarGlory Hotel and Chateau International 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 Chateau International. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Chateau International.
Diversification Opportunities for FarGlory Hotel and Chateau International
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FarGlory and Chateau is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Chateau International Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chateau International 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 Chateau International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chateau International has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Chateau International go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Chateau International
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to generate 0.63 times more return on investment than Chateau International. However, FarGlory Hotel Co is 1.6 times less risky than Chateau International. It trades about -0.08 of its potential returns per unit of risk. Chateau International Development is currently generating about -0.06 per unit of risk. If you would invest 3,475 in FarGlory Hotel Co on October 24, 2024 and sell it today you would lose (965.00) from holding FarGlory Hotel Co or give up 27.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Chateau International Developm
Performance |
| Timeline |
| FarGlory Hotel |
| Chateau International |
FarGlory Hotel and Chateau International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Chateau International
The main advantage of trading using opposite FarGlory Hotel and Chateau International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Chateau International 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 Chateau International will offset losses from the drop in Chateau International'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 |
| Chateau International vs. Lion Travel Service | Chateau International vs. Wanhwa Enterprise Co | Chateau International vs. Wowprime Corp | Chateau International vs. FarGlory Hotel 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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