Correlation Between COVIVIO HOTELS and CVW CLEANTECH
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS and CVW CLEANTECH 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 CVW CLEANTECH 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 CVW CLEANTECH INC, you can compare the effects of market volatilities on COVIVIO HOTELS and CVW CLEANTECH 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 CVW CLEANTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and CVW CLEANTECH.
Diversification Opportunities for COVIVIO HOTELS and CVW CLEANTECH
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COVIVIO and CVW is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and CVW CLEANTECH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CLEANTECH INC 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 CVW CLEANTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CLEANTECH INC has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and CVW CLEANTECH go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and CVW CLEANTECH
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to under-perform the CVW CLEANTECH. But the stock apears to be less risky and, when comparing its historical volatility, COVIVIO HOTELS INH is 2.47 times less risky than CVW CLEANTECH. The stock trades about -0.16 of its potential returns per unit of risk. The CVW CLEANTECH INC is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 53.00 in CVW CLEANTECH INC on August 28, 2024 and sell it today you would earn a total of 5.00 from holding CVW CLEANTECH INC or generate 9.43% 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. CVW CLEANTECH INC
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| CVW CLEANTECH INC |
COVIVIO HOTELS and CVW CLEANTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and CVW CLEANTECH
The main advantage of trading using opposite COVIVIO HOTELS and CVW CLEANTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS position performs unexpectedly, CVW CLEANTECH 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 CVW CLEANTECH will offset losses from the drop in CVW CLEANTECH's long position.| COVIVIO HOTELS vs. Charter Communications | COVIVIO HOTELS vs. Consolidated Communications Holdings | COVIVIO HOTELS vs. Entravision Communications | COVIVIO HOTELS vs. Beijing Media |
| CVW CLEANTECH vs. Superior Plus Corp | CVW CLEANTECH vs. NMI Holdings | CVW CLEANTECH vs. Origin Agritech | CVW CLEANTECH 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |