Correlation Between COVIVIO HOTELS and Clean Energy
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on COVIVIO HOTELS and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Clean Energy.
Diversification Opportunities for COVIVIO HOTELS and Clean Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between COVIVIO and Clean is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and Clean Energy go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Clean Energy
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to generate 0.14 times more return on investment than Clean Energy. However, COVIVIO HOTELS INH is 7.2 times less risky than Clean Energy. It trades about -0.1 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about -0.05 per unit of risk. If you would invest 1,840 in COVIVIO HOTELS INH on September 12, 2024 and sell it today you would lose (25.00) from holding COVIVIO HOTELS INH or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. Clean Energy Fuels
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Clean Energy Fuels |
COVIVIO HOTELS and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Clean Energy
The main advantage of trading using opposite COVIVIO HOTELS and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy'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 |
| Clean Energy vs. NISSAN CHEMICAL IND | Clean Energy vs. PRECISION DRILLING P | Clean Energy vs. Consolidated Communications Holdings | Clean Energy vs. Nissan Chemical Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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