Correlation Between PPHE HOTEL and Auto Trader
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Auto Trader 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 Auto Trader 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 Auto Trader Group, you can compare the effects of market volatilities on PPHE HOTEL and Auto Trader 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 Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Auto Trader.
Diversification Opportunities for PPHE HOTEL and Auto Trader
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and Auto is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group 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 Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Auto Trader go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Auto Trader
Assuming the 90 days trading horizon PPHE HOTEL is expected to generate 1.98 times less return on investment than Auto Trader. In addition to that, PPHE HOTEL is 1.19 times more volatile than Auto Trader Group. It trades about 0.03 of its total potential returns per unit of risk. Auto Trader Group is currently generating about 0.08 per unit of volatility. If you would invest 572.00 in Auto Trader Group on September 20, 2024 and sell it today you would earn a total of 408.00 from holding Auto Trader Group or generate 71.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Auto Trader Group
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Auto Trader Group |
PPHE HOTEL and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Auto Trader
The main advantage of trading using opposite PPHE HOTEL and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| PPHE HOTEL vs. NORTHEAST UTILITIES | PPHE HOTEL vs. LG Display Co | PPHE HOTEL vs. ELMOS SEMICONDUCTOR | PPHE HOTEL vs. MagnaChip Semiconductor Corp |
| Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc | Auto Trader vs. Apple Inc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |