Correlation Between Tencent Music and MHP Hotel
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By analyzing existing cross correlation between Tencent Music Entertainment and MHP Hotel AG, you can compare the effects of market volatilities on Tencent Music 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 Tencent Music with a short position of MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Music and MHP Hotel.
Diversification Opportunities for Tencent Music and MHP Hotel
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tencent and MHP is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Music Entertainment 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 Tencent Music 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 Tencent Music Entertainment 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 Tencent Music i.e., Tencent Music and MHP Hotel go up and down completely randomly.
Pair Corralation between Tencent Music and MHP Hotel
Assuming the 90 days trading horizon Tencent Music Entertainment is expected to under-perform the MHP Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Tencent Music Entertainment is 1.37 times less risky than MHP Hotel. The stock trades about -0.15 of its potential returns per unit of risk. The MHP Hotel AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 120.00 in MHP Hotel AG on October 12, 2024 and sell it today you would earn a total of 5.00 from holding MHP Hotel AG or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tencent Music Entertainment vs. MHP Hotel AG
Performance |
| Timeline |
| Tencent Music Entert |
| MHP Hotel AG |
Tencent Music and MHP Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tencent Music and MHP Hotel
The main advantage of trading using opposite Tencent Music and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Music 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.| Tencent Music vs. GALENA MINING LTD | Tencent Music vs. Yuexiu Transport Infrastructure | Tencent Music vs. GREENX METALS LTD | Tencent Music vs. ADRIATIC METALS LS 013355 |
| MHP Hotel vs. United Utilities Group | MHP Hotel vs. Algonquin Power Utilities | MHP Hotel vs. Tencent Music Entertainment | MHP Hotel vs. Wizz Air Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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