Correlation Between PPHE HOTEL and KEISEI EL
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and KEISEI EL 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 KEISEI EL 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 KEISEI EL RAILWAY, you can compare the effects of market volatilities on PPHE HOTEL and KEISEI EL 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 KEISEI EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and KEISEI EL.
Diversification Opportunities for PPHE HOTEL and KEISEI EL
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PPHE and KEISEI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and KEISEI EL RAILWAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEISEI EL RAILWAY 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 KEISEI EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEISEI EL RAILWAY has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and KEISEI EL go up and down completely randomly.
Pair Corralation between PPHE HOTEL and KEISEI EL
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 0.68 times more return on investment than KEISEI EL. However, PPHE HOTEL GROUP is 1.48 times less risky than KEISEI EL. It trades about 0.1 of its potential returns per unit of risk. KEISEI EL RAILWAY is currently generating about 0.07 per unit of risk. If you would invest 1,380 in PPHE HOTEL GROUP on October 14, 2024 and sell it today you would earn a total of 150.00 from holding PPHE HOTEL GROUP or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. KEISEI EL RAILWAY
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| KEISEI EL RAILWAY |
PPHE HOTEL and KEISEI EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and KEISEI EL
The main advantage of trading using opposite PPHE HOTEL and KEISEI EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, KEISEI EL 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 KEISEI EL will offset losses from the drop in KEISEI EL's long position.| PPHE HOTEL vs. Quaker Chemical | PPHE HOTEL vs. Soken Chemical Engineering | PPHE HOTEL vs. Corporate Travel Management | PPHE HOTEL vs. Sinopec Shanghai Petrochemical |
| KEISEI EL vs. DALATA HOTEL | KEISEI EL vs. PPHE HOTEL GROUP | KEISEI EL vs. PLAYMATES TOYS | KEISEI EL vs. The Hongkong and |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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