Correlation Between PPHE HOTEL and Micron Technology
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Micron Technology 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 Micron Technology 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 Micron Technology, you can compare the effects of market volatilities on PPHE HOTEL and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Micron Technology.
Diversification Opportunities for PPHE HOTEL and Micron Technology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and Micron is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Micron Technology go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Micron Technology
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 0.41 times more return on investment than Micron Technology. However, PPHE HOTEL GROUP is 2.43 times less risky than Micron Technology. It trades about 0.38 of its potential returns per unit of risk. Micron Technology is currently generating about -0.12 per unit of risk. If you would invest 1,380 in PPHE HOTEL GROUP on September 22, 2024 and sell it today you would earn a total of 230.00 from holding PPHE HOTEL GROUP or generate 16.67% 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. Micron Technology
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Micron Technology |
PPHE HOTEL and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Micron Technology
The main advantage of trading using opposite PPHE HOTEL and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| PPHE HOTEL vs. DALATA HOTEL | PPHE HOTEL vs. JJ SNACK FOODS | PPHE HOTEL vs. Tyson Foods | PPHE HOTEL vs. Lifeway Foods |
| Micron Technology vs. Southwest Airlines Co | Micron Technology vs. PPHE HOTEL GROUP | Micron Technology vs. Xenia Hotels Resorts | Micron Technology vs. MIRAMAR HOTEL INV |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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