Correlation Between H FARM and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both H FARM and COVIVIO HOTELS 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 H FARM and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and COVIVIO HOTELS INH, you can compare the effects of market volatilities on H FARM and COVIVIO HOTELS 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 H FARM with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and COVIVIO HOTELS.
Diversification Opportunities for H FARM and COVIVIO HOTELS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 5JQ and COVIVIO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH and H FARM 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 H FARM SPA are associated (or correlated) with COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of H FARM i.e., H FARM and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between H FARM and COVIVIO HOTELS
Assuming the 90 days horizon H FARM SPA is expected to generate 4.43 times more return on investment than COVIVIO HOTELS. However, H FARM is 4.43 times more volatile than COVIVIO HOTELS INH. It trades about 0.09 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.2 per unit of risk. If you would invest 12.00 in H FARM SPA on October 14, 2024 and sell it today you would earn a total of 1.00 from holding H FARM SPA or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| H FARM SPA |
| COVIVIO HOTELS INH |
H FARM and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and COVIVIO HOTELS
The main advantage of trading using opposite H FARM and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| H FARM vs. United Airlines Holdings | H FARM vs. Gol Intelligent Airlines | H FARM vs. JAPAN AIRLINES | H FARM vs. Keck Seng Investments |
| COVIVIO HOTELS vs. TRAVEL LEISURE DL 01 | COVIVIO HOTELS vs. Playmates Toys Limited | COVIVIO HOTELS vs. ANTA SPORTS PRODUCT | COVIVIO HOTELS vs. Columbia Sportswear |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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