Correlation Between COVIVIO HOTELS and Air Lease
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS and Air Lease 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 COVIVIO HOTELS and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COVIVIO HOTELS INH and Air Lease, you can compare the effects of market volatilities on COVIVIO HOTELS and Air Lease 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 COVIVIO HOTELS with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Air Lease.
Diversification Opportunities for COVIVIO HOTELS and Air Lease
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COVIVIO and Air is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and COVIVIO HOTELS 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 COVIVIO HOTELS INH are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and Air Lease go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Air Lease
Assuming the 90 days horizon COVIVIO HOTELS is expected to generate 1.07 times less return on investment than Air Lease. But when comparing it to its historical volatility, COVIVIO HOTELS INH is 1.24 times less risky than Air Lease. It trades about 0.06 of its potential returns per unit of risk. Air Lease is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,314 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,426 from holding Air Lease or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. Air Lease
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Air Lease |
COVIVIO HOTELS and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Air Lease
The main advantage of trading using opposite COVIVIO HOTELS and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| COVIVIO HOTELS vs. Singapore Telecommunications Limited | COVIVIO HOTELS vs. Charter Communications | COVIVIO HOTELS vs. VIVA WINE GROUP | COVIVIO HOTELS vs. Bumrungrad Hospital Public |
| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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