Correlation Between PPHE HOTEL and Hapag-Lloyd
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Hapag-Lloyd 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 Hapag-Lloyd 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 Hapag Lloyd AG, you can compare the effects of market volatilities on PPHE HOTEL and Hapag-Lloyd 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 Hapag-Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Hapag-Lloyd.
Diversification Opportunities for PPHE HOTEL and Hapag-Lloyd
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PPHE and Hapag-Lloyd is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Hapag Lloyd AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd AG 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 Hapag-Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd AG has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Hapag-Lloyd go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Hapag-Lloyd
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 0.77 times more return on investment than Hapag-Lloyd. However, PPHE HOTEL GROUP is 1.3 times less risky than Hapag-Lloyd. It trades about 0.19 of its potential returns per unit of risk. Hapag Lloyd AG is currently generating about 0.05 per unit of risk. If you would invest 1,450 in PPHE HOTEL GROUP on September 12, 2024 and sell it today you would earn a total of 130.00 from holding PPHE HOTEL GROUP or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Hapag Lloyd AG
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Hapag Lloyd AG |
PPHE HOTEL and Hapag-Lloyd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Hapag-Lloyd
The main advantage of trading using opposite PPHE HOTEL and Hapag-Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Hapag-Lloyd 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 Hapag-Lloyd will offset losses from the drop in Hapag-Lloyd's long position.The idea behind PPHE HOTEL GROUP and Hapag Lloyd AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hapag-Lloyd vs. Dalata Hotel Group | Hapag-Lloyd vs. DALATA HOTEL | Hapag-Lloyd vs. Wayside Technology Group | Hapag-Lloyd vs. PPHE HOTEL GROUP |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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