Correlation Between Aages SA and Compania Hoteliera
Can any of the company-specific risk be diversified away by investing in both Aages SA and Compania Hoteliera 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 Aages SA and Compania Hoteliera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aages SA and Compania Hoteliera InterContinental, you can compare the effects of market volatilities on Aages SA and Compania Hoteliera 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 Aages SA with a short position of Compania Hoteliera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aages SA and Compania Hoteliera.
Diversification Opportunities for Aages SA and Compania Hoteliera
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aages and Compania is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aages SA and Compania Hoteliera InterContin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Hoteliera and Aages SA 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 Aages SA are associated (or correlated) with Compania Hoteliera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Hoteliera has no effect on the direction of Aages SA i.e., Aages SA and Compania Hoteliera go up and down completely randomly.
Pair Corralation between Aages SA and Compania Hoteliera
Assuming the 90 days trading horizon Aages SA is expected to generate 0.52 times more return on investment than Compania Hoteliera. However, Aages SA is 1.91 times less risky than Compania Hoteliera. It trades about -0.07 of its potential returns per unit of risk. Compania Hoteliera InterContinental is currently generating about -0.24 per unit of risk. If you would invest 635.00 in Aages SA on November 4, 2024 and sell it today you would lose (10.00) from holding Aages SA or give up 1.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Aages SA vs. Compania Hoteliera InterContin
Performance |
| Timeline |
| Aages SA |
| Compania Hoteliera |
Aages SA and Compania Hoteliera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aages SA and Compania Hoteliera
The main advantage of trading using opposite Aages SA and Compania Hoteliera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aages SA position performs unexpectedly, Compania Hoteliera 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 Compania Hoteliera will offset losses from the drop in Compania Hoteliera's long position.| Aages SA vs. TRANSILVANIA LEASING SI | Aages SA vs. AROBS TRANSILVANIA SOFTWARE | Aages SA vs. TRANSILVANIA INVESTMENTS ALLIANCE | Aages SA vs. IM Vinaria Purcari |
| Compania Hoteliera vs. Evergent Investments SA | Compania Hoteliera vs. Erste Group Bank | Compania Hoteliera vs. IHUNT TECHNOLOGY IMPORT EXPORT | Compania Hoteliera vs. Digi Communications NV |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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