Correlation Between ALD SA and MHP Hotel
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By analyzing existing cross correlation between ALD SA and MHP Hotel AG, you can compare the effects of market volatilities on ALD SA and MHP Hotel 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 ALD SA with a short position of MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALD SA and MHP Hotel.
Diversification Opportunities for ALD SA and MHP Hotel
Good diversification
The 3 months correlation between ALD and MHP is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ALD SA and MHP Hotel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP Hotel AG and ALD SA 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 ALD SA are associated (or correlated) with MHP Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP Hotel AG has no effect on the direction of ALD SA i.e., ALD SA and MHP Hotel go up and down completely randomly.
Pair Corralation between ALD SA and MHP Hotel
Assuming the 90 days horizon ALD SA is expected to under-perform the MHP Hotel. In addition to that, ALD SA is 1.32 times more volatile than MHP Hotel AG. It trades about -0.02 of its total potential returns per unit of risk. MHP Hotel AG is currently generating about 0.01 per unit of volatility. If you would invest 125.00 in MHP Hotel AG on September 12, 2024 and sell it today you would lose (3.00) from holding MHP Hotel AG or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALD SA vs. MHP Hotel AG
Performance |
| Timeline |
| ALD SA |
| MHP Hotel AG |
ALD SA and MHP Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALD SA and MHP Hotel
The main advantage of trading using opposite ALD SA and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALD SA position performs unexpectedly, MHP Hotel 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 MHP Hotel will offset losses from the drop in MHP Hotel's long position.| ALD SA vs. CSSC Offshore Marine | ALD SA vs. STMicroelectronics NV | ALD SA vs. STORE ELECTRONIC | ALD SA vs. Eidesvik Offshore ASA |
| MHP Hotel vs. Superior Plus Corp | MHP Hotel vs. SIVERS SEMICONDUCTORS AB | MHP Hotel vs. Norsk Hydro ASA | MHP Hotel vs. Reliance Steel Aluminum |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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