Correlation Between HOYA Resort and La Kaffa
Can any of the company-specific risk be diversified away by investing in both HOYA Resort and La Kaffa 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 HOYA Resort and La Kaffa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOYA Resort Hotel and La Kaffa International, you can compare the effects of market volatilities on HOYA Resort and La Kaffa 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 HOYA Resort with a short position of La Kaffa. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOYA Resort and La Kaffa.
Diversification Opportunities for HOYA Resort and La Kaffa
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HOYA and 2732 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Resort Hotel and La Kaffa International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Kaffa International and HOYA Resort 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 HOYA Resort Hotel are associated (or correlated) with La Kaffa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Kaffa International has no effect on the direction of HOYA Resort i.e., HOYA Resort and La Kaffa go up and down completely randomly.
Pair Corralation between HOYA Resort and La Kaffa
Assuming the 90 days trading horizon HOYA Resort Hotel is expected to generate 1.35 times more return on investment than La Kaffa. However, HOYA Resort is 1.35 times more volatile than La Kaffa International. It trades about 0.01 of its potential returns per unit of risk. La Kaffa International is currently generating about 0.0 per unit of risk. If you would invest 2,115 in HOYA Resort Hotel on September 12, 2024 and sell it today you would lose (235.00) from holding HOYA Resort Hotel or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
HOYA Resort Hotel vs. La Kaffa International
Performance |
| Timeline |
| HOYA Resort Hotel |
| La Kaffa International |
HOYA Resort and La Kaffa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOYA Resort and La Kaffa
The main advantage of trading using opposite HOYA Resort and La Kaffa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOYA Resort position performs unexpectedly, La Kaffa 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 La Kaffa will offset losses from the drop in La Kaffa's long position.| HOYA Resort vs. Formosa International Hotels | HOYA Resort vs. Ambassador Hotel | HOYA Resort vs. FDC International Hotels | HOYA Resort vs. First Hotel Co |
| La Kaffa vs. HOYA Resort Hotel | La Kaffa vs. Chicony Power Technology | La Kaffa vs. United Radiant Technology | La Kaffa vs. Ambassador Hotel |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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