Correlation Between ACCOR SPADR and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both ACCOR SPADR and Dalata 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 ACCOR SPADR and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACCOR SPADR NEW and Dalata Hotel Group, you can compare the effects of market volatilities on ACCOR SPADR and Dalata 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 ACCOR SPADR with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCOR SPADR and Dalata Hotel.
Diversification Opportunities for ACCOR SPADR and Dalata Hotel
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ACCOR and Dalata is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ACCOR SPADR NEW and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and ACCOR SPADR 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 ACCOR SPADR NEW are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of ACCOR SPADR i.e., ACCOR SPADR and Dalata Hotel go up and down completely randomly.
Pair Corralation between ACCOR SPADR and Dalata Hotel
Assuming the 90 days trading horizon ACCOR SPADR NEW is expected to generate 1.03 times more return on investment than Dalata Hotel. However, ACCOR SPADR is 1.03 times more volatile than Dalata Hotel Group. It trades about 0.07 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.03 per unit of risk. If you would invest 769.00 in ACCOR SPADR NEW on August 31, 2024 and sell it today you would earn a total of 106.00 from holding ACCOR SPADR NEW or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACCOR SPADR NEW vs. Dalata Hotel Group
Performance |
| Timeline |
| ACCOR SPADR NEW |
| Dalata Hotel Group |
ACCOR SPADR and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACCOR SPADR and Dalata Hotel
The main advantage of trading using opposite ACCOR SPADR and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCOR SPADR position performs unexpectedly, Dalata 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| ACCOR SPADR vs. Haier Smart Home | ACCOR SPADR vs. INVITATION HOMES DL | ACCOR SPADR vs. American Homes 4 | ACCOR SPADR vs. Haverty Furniture Companies |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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