Correlation Between PPHE HOTEL and AWILCO DRILLING
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and AWILCO DRILLING 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 PPHE HOTEL and AWILCO DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and AWILCO DRILLING PLC, you can compare the effects of market volatilities on PPHE HOTEL and AWILCO DRILLING 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 PPHE HOTEL with a short position of AWILCO DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and AWILCO DRILLING.
Diversification Opportunities for PPHE HOTEL and AWILCO DRILLING
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PPHE and AWILCO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and AWILCO DRILLING PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AWILCO DRILLING PLC and PPHE 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 PPHE HOTEL GROUP are associated (or correlated) with AWILCO DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AWILCO DRILLING PLC has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and AWILCO DRILLING go up and down completely randomly.
Pair Corralation between PPHE HOTEL and AWILCO DRILLING
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the AWILCO DRILLING. But the stock apears to be less risky and, when comparing its historical volatility, PPHE HOTEL GROUP is 1.86 times less risky than AWILCO DRILLING. The stock trades about -0.22 of its potential returns per unit of risk. The AWILCO DRILLING PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 191.00 in AWILCO DRILLING PLC on October 29, 2024 and sell it today you would earn a total of 0.00 from holding AWILCO DRILLING PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. AWILCO DRILLING PLC
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| AWILCO DRILLING PLC |
PPHE HOTEL and AWILCO DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and AWILCO DRILLING
The main advantage of trading using opposite PPHE HOTEL and AWILCO DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, AWILCO DRILLING 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 AWILCO DRILLING will offset losses from the drop in AWILCO DRILLING's long position.| PPHE HOTEL vs. Boyd Gaming | PPHE HOTEL vs. CompuGroup Medical SE | PPHE HOTEL vs. Corsair Gaming | PPHE HOTEL vs. PLAYMATES TOYS |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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