Correlation Between COVIVIO HOTELS and REGAL HOTEL
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS and REGAL HOTEL 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 REGAL HOTEL 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 REGAL HOTEL INTL, you can compare the effects of market volatilities on COVIVIO HOTELS and REGAL 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 COVIVIO HOTELS with a short position of REGAL HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and REGAL HOTEL.
Diversification Opportunities for COVIVIO HOTELS and REGAL HOTEL
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between COVIVIO and REGAL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and REGAL HOTEL INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL HOTEL INTL 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 REGAL HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL HOTEL INTL has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and REGAL HOTEL go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and REGAL HOTEL
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to generate 0.66 times more return on investment than REGAL HOTEL. However, COVIVIO HOTELS INH is 1.53 times less risky than REGAL HOTEL. It trades about 0.12 of its potential returns per unit of risk. REGAL HOTEL INTL is currently generating about -0.03 per unit of risk. If you would invest 1,525 in COVIVIO HOTELS INH on October 25, 2024 and sell it today you would earn a total of 365.00 from holding COVIVIO HOTELS INH or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. REGAL HOTEL INTL
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| REGAL HOTEL INTL |
COVIVIO HOTELS and REGAL HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and REGAL HOTEL
The main advantage of trading using opposite COVIVIO HOTELS and REGAL HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS position performs unexpectedly, REGAL 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 REGAL HOTEL will offset losses from the drop in REGAL HOTEL's long position.| COVIVIO HOTELS vs. MEDICAL FACILITIES NEW | COVIVIO HOTELS vs. Inspire Medical Systems | COVIVIO HOTELS vs. Guangdong Investment Limited | COVIVIO HOTELS vs. PEPTONIC MEDICAL |
| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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