Correlation Between PPHE HOTEL and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on PPHE HOTEL and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Safestore Holdings.
Diversification Opportunities for PPHE HOTEL and Safestore Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PPHE and Safestore is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Safestore Holdings go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Safestore Holdings
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 0.84 times more return on investment than Safestore Holdings. However, PPHE HOTEL GROUP is 1.19 times less risky than Safestore Holdings. It trades about 0.07 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.19 per unit of risk. If you would invest 1,410 in PPHE HOTEL GROUP on October 28, 2024 and sell it today you would earn a total of 70.00 from holding PPHE HOTEL GROUP or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Safestore Holdings plc
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Safestore Holdings plc |
PPHE HOTEL and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Safestore Holdings
The main advantage of trading using opposite PPHE HOTEL and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| PPHE HOTEL vs. NTT DATA | PPHE HOTEL vs. Automatic Data Processing | PPHE HOTEL vs. JAPAN AIRLINES | PPHE HOTEL vs. CN DATANG C |
| Safestore Holdings vs. Lyxor 1 | Safestore Holdings vs. Xtrackers LevDAX | Safestore Holdings vs. Xtrackers ShortDAX | Safestore Holdings vs. Superior Plus 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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