Correlation Between WIMFARM SA and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA 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 WIMFARM SA and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and COVIVIO HOTELS INH, you can compare the effects of market volatilities on WIMFARM SA 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 WIMFARM SA with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and COVIVIO HOTELS.
Diversification Opportunities for WIMFARM SA and COVIVIO HOTELS
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WIMFARM and COVIVIO is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO 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 WIMFARM 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 WIMFARM SA EO 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 WIMFARM SA i.e., WIMFARM SA and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between WIMFARM SA and COVIVIO HOTELS
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the COVIVIO HOTELS. In addition to that, WIMFARM SA is 2.64 times more volatile than COVIVIO HOTELS INH. It trades about -0.34 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about -0.19 per unit of volatility. If you would invest 1,870 in COVIVIO HOTELS INH on August 26, 2024 and sell it today you would lose (50.00) from holding COVIVIO HOTELS INH or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| WIMFARM SA EO |
| COVIVIO HOTELS INH |
WIMFARM SA and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and COVIVIO HOTELS
The main advantage of trading using opposite WIMFARM SA and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA 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.| WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. NMI Holdings | WIMFARM SA vs. Origin Agritech | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
| COVIVIO HOTELS vs. UET United Electronic | COVIVIO HOTELS vs. Align Technology | COVIVIO HOTELS vs. Micron Technology | COVIVIO HOTELS vs. Methode Electronics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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