Correlation Between ALEFARM BREWING and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both ALEFARM BREWING 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 ALEFARM BREWING and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALEFARM BREWING DK 05 and COVIVIO HOTELS INH, you can compare the effects of market volatilities on ALEFARM BREWING 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 ALEFARM BREWING with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and COVIVIO HOTELS.
Diversification Opportunities for ALEFARM BREWING and COVIVIO HOTELS
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALEFARM and COVIVIO is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 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 ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 ALEFARM BREWING i.e., ALEFARM BREWING and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between ALEFARM BREWING and COVIVIO HOTELS
Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to under-perform the COVIVIO HOTELS. In addition to that, ALEFARM BREWING is 2.49 times more volatile than COVIVIO HOTELS INH. It trades about -0.23 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.25 per unit of volatility. If you would invest 1,820 in COVIVIO HOTELS INH on September 26, 2024 and sell it today you would earn a total of 165.00 from holding COVIVIO HOTELS INH or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALEFARM BREWING DK 05 vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| ALEFARM BREWING DK |
| COVIVIO HOTELS INH |
ALEFARM BREWING and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALEFARM BREWING and COVIVIO HOTELS
The main advantage of trading using opposite ALEFARM BREWING and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING 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.| ALEFARM BREWING vs. NIPPON STEEL SPADR | ALEFARM BREWING vs. ALGOMA STEEL GROUP | ALEFARM BREWING vs. Direct Line Insurance | ALEFARM BREWING vs. KRAKATAU STEEL B |
| COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc | COVIVIO HOTELS vs. Apple Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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