Correlation Between ACS Actividades and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both ACS Actividades and Choice Hotels 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 ACS Actividades and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACS Actividades de and Choice Hotels International, you can compare the effects of market volatilities on ACS Actividades and Choice Hotels 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 ACS Actividades with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Choice Hotels.
Diversification Opportunities for ACS Actividades and Choice Hotels
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ACS and Choice is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades de and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and ACS Actividades 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 ACS Actividades de are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of ACS Actividades i.e., ACS Actividades and Choice Hotels go up and down completely randomly.
Pair Corralation between ACS Actividades and Choice Hotels
Assuming the 90 days horizon ACS Actividades de is expected to generate 4.35 times more return on investment than Choice Hotels. However, ACS Actividades is 4.35 times more volatile than Choice Hotels International. It trades about 0.06 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.03 per unit of risk. If you would invest 2,374 in ACS Actividades de on November 2, 2024 and sell it today you would earn a total of 2,476 from holding ACS Actividades de or generate 104.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.35% |
| Values | Daily Returns |
ACS Actividades de vs. Choice Hotels International
Performance |
| Timeline |
| ACS Actividades de |
| Choice Hotels Intern |
ACS Actividades and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACS Actividades and Choice Hotels
The main advantage of trading using opposite ACS Actividades and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| ACS Actividades vs. Acciona SA | ACS Actividades vs. JGC Corp | ACS Actividades vs. Kajima Corp ADR | ACS Actividades vs. ACS Actividades De |
| Choice Hotels vs. Hyatt Hotels | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. Marriott International |
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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