Correlation Between Alfa Financial and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and PPHE 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 Alfa Financial and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and PPHE HOTEL GROUP, you can compare the effects of market volatilities on Alfa Financial and PPHE 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 Alfa Financial with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and PPHE HOTEL.
Diversification Opportunities for Alfa Financial and PPHE HOTEL
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alfa and PPHE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of Alfa Financial i.e., Alfa Financial and PPHE HOTEL go up and down completely randomly.
Pair Corralation between Alfa Financial and PPHE HOTEL
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 1.25 times more return on investment than PPHE HOTEL. However, Alfa Financial is 1.25 times more volatile than PPHE HOTEL GROUP. It trades about 0.08 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.02 per unit of risk. If you would invest 214.00 in Alfa Financial Software on November 2, 2024 and sell it today you would earn a total of 36.00 from holding Alfa Financial Software or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| Alfa Financial Software |
| PPHE HOTEL GROUP |
Alfa Financial and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and PPHE HOTEL
The main advantage of trading using opposite Alfa Financial and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, PPHE 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| Alfa Financial vs. Wyndham Hotels Resorts | Alfa Financial vs. Regal Hotels International | Alfa Financial vs. PNC Financial Services | Alfa Financial vs. HYATT HOTELS A |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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