Correlation Between COVIVIO HOTELS and Japan Asia
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on COVIVIO HOTELS and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Japan Asia.
Diversification Opportunities for COVIVIO HOTELS and Japan Asia
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COVIVIO and Japan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and Japan Asia go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Japan Asia
Assuming the 90 days horizon COVIVIO HOTELS is expected to generate 1.36 times less return on investment than Japan Asia. In addition to that, COVIVIO HOTELS is 1.3 times more volatile than Japan Asia Investment. It trades about 0.06 of its total potential returns per unit of risk. Japan Asia Investment is currently generating about 0.11 per unit of volatility. If you would invest 122.00 in Japan Asia Investment on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Japan Asia Investment or generate 3.28% 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. Japan Asia Investment
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Japan Asia Investment |
COVIVIO HOTELS and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Japan Asia
The main advantage of trading using opposite COVIVIO HOTELS and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| COVIVIO HOTELS vs. CANON MARKETING JP | COVIVIO HOTELS vs. AUTO TRADER ADR | COVIVIO HOTELS vs. Salesforce | COVIVIO HOTELS vs. TRADELINK ELECTRON |
| Japan Asia vs. AAC TECHNOLOGHLDGADR | Japan Asia vs. Host Hotels Resorts | Japan Asia vs. Axcelis Technologies | Japan Asia vs. COVIVIO HOTELS INH |
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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