Correlation Between Loop Telecommunicatio and Hotel Holiday
Can any of the company-specific risk be diversified away by investing in both Loop Telecommunicatio and Hotel Holiday 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 Loop Telecommunicatio and Hotel Holiday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Telecommunication International and Hotel Holiday Garden, you can compare the effects of market volatilities on Loop Telecommunicatio and Hotel Holiday 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 Loop Telecommunicatio with a short position of Hotel Holiday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Telecommunicatio and Hotel Holiday.
Diversification Opportunities for Loop Telecommunicatio and Hotel Holiday
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Loop and Hotel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Loop Telecommunication Interna and Hotel Holiday Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Holiday Garden and Loop Telecommunicatio 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 Loop Telecommunication International are associated (or correlated) with Hotel Holiday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Holiday Garden has no effect on the direction of Loop Telecommunicatio i.e., Loop Telecommunicatio and Hotel Holiday go up and down completely randomly.
Pair Corralation between Loop Telecommunicatio and Hotel Holiday
Assuming the 90 days trading horizon Loop Telecommunication International is expected to generate 2.42 times more return on investment than Hotel Holiday. However, Loop Telecommunicatio is 2.42 times more volatile than Hotel Holiday Garden. It trades about 0.02 of its potential returns per unit of risk. Hotel Holiday Garden is currently generating about -0.05 per unit of risk. If you would invest 7,210 in Loop Telecommunication International on September 3, 2024 and sell it today you would earn a total of 280.00 from holding Loop Telecommunication International or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Telecommunication Interna vs. Hotel Holiday Garden
Performance |
| Timeline |
| Loop Telecommunication |
| Hotel Holiday Garden |
Loop Telecommunicatio and Hotel Holiday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Telecommunicatio and Hotel Holiday
The main advantage of trading using opposite Loop Telecommunicatio and Hotel Holiday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Telecommunicatio position performs unexpectedly, Hotel Holiday 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 Hotel Holiday will offset losses from the drop in Hotel Holiday's long position.| Loop Telecommunicatio vs. Taiwan Semiconductor Manufacturing | Loop Telecommunicatio vs. Yang Ming Marine | Loop Telecommunicatio vs. ASE Industrial Holding | Loop Telecommunicatio vs. AU Optronics |
| Hotel Holiday vs. Tainan Spinning Co | Hotel Holiday vs. Chia Her Industrial | Hotel Holiday vs. WiseChip Semiconductor | Hotel Holiday vs. Novatek Microelectronics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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