Correlation Between FarGlory Hotel and HOYA Resort
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and HOYA Resort 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 HOYA Resort 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 HOYA Resort Hotel, you can compare the effects of market volatilities on FarGlory Hotel and HOYA Resort 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 HOYA Resort. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and HOYA Resort.
Diversification Opportunities for FarGlory Hotel and HOYA Resort
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FarGlory and HOYA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and HOYA Resort Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA Resort Hotel 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 HOYA Resort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA Resort Hotel has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and HOYA Resort go up and down completely randomly.
Pair Corralation between FarGlory Hotel and HOYA Resort
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the HOYA Resort. In addition to that, FarGlory Hotel is 1.14 times more volatile than HOYA Resort Hotel. It trades about -0.14 of its total potential returns per unit of risk. HOYA Resort Hotel is currently generating about -0.13 per unit of volatility. If you would invest 1,955 in HOYA Resort Hotel on August 28, 2024 and sell it today you would lose (80.00) from holding HOYA Resort Hotel or give up 4.09% 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. HOYA Resort Hotel
Performance |
| Timeline |
| FarGlory Hotel |
| HOYA Resort Hotel |
FarGlory Hotel and HOYA Resort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and HOYA Resort
The main advantage of trading using opposite FarGlory Hotel and HOYA Resort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, HOYA Resort 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 HOYA Resort will offset losses from the drop in HOYA Resort's long position.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. First Hotel Co | FarGlory Hotel vs. FDC International Hotels | FarGlory Hotel vs. Ruentex Development Co |
| HOYA Resort vs. Formosa International Hotels | HOYA Resort vs. Ambassador Hotel | HOYA Resort vs. FDC International Hotels | HOYA Resort vs. First 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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