Correlation Between PPHE HOTEL and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on PPHE HOTEL and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and RETAIL FOOD.
Diversification Opportunities for PPHE HOTEL and RETAIL FOOD
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and RETAIL is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and RETAIL FOOD go up and down completely randomly.
Pair Corralation between PPHE HOTEL and RETAIL FOOD
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 0.59 times more return on investment than RETAIL FOOD. However, PPHE HOTEL GROUP is 1.69 times less risky than RETAIL FOOD. It trades about 0.03 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about 0.0 per unit of risk. If you would invest 1,279 in PPHE HOTEL GROUP on September 14, 2024 and sell it today you would earn a total of 311.00 from holding PPHE HOTEL GROUP or generate 24.32% 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. RETAIL FOOD GROUP
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| RETAIL FOOD GROUP |
PPHE HOTEL and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and RETAIL FOOD
The main advantage of trading using opposite PPHE HOTEL and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.The idea behind PPHE HOTEL GROUP and RETAIL FOOD GROUP 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.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |