Correlation Between Adgar Investments and Netz Hotels
Can any of the company-specific risk be diversified away by investing in both Adgar Investments and Netz 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 Adgar Investments and Netz Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adgar Investments and and Netz Hotels, you can compare the effects of market volatilities on Adgar Investments and Netz 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 Adgar Investments with a short position of Netz Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adgar Investments and Netz Hotels.
Diversification Opportunities for Adgar Investments and Netz Hotels
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adgar and Netz is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Adgar Investments and and Netz Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netz Hotels and Adgar Investments 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 Adgar Investments and are associated (or correlated) with Netz Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netz Hotels has no effect on the direction of Adgar Investments i.e., Adgar Investments and Netz Hotels go up and down completely randomly.
Pair Corralation between Adgar Investments and Netz Hotels
Assuming the 90 days trading horizon Adgar Investments is expected to generate 2.77 times less return on investment than Netz Hotels. But when comparing it to its historical volatility, Adgar Investments and is 2.41 times less risky than Netz Hotels. It trades about 0.3 of its potential returns per unit of risk. Netz Hotels is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,750 in Netz Hotels on August 30, 2024 and sell it today you would earn a total of 600.00 from holding Netz Hotels or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adgar Investments and vs. Netz Hotels
Performance |
| Timeline |
| Adgar Investments |
| Netz Hotels |
Adgar Investments and Netz Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adgar Investments and Netz Hotels
The main advantage of trading using opposite Adgar Investments and Netz Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adgar Investments position performs unexpectedly, Netz 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 Netz Hotels will offset losses from the drop in Netz Hotels' long position.| Adgar Investments vs. Alony Hetz Properties | Adgar Investments vs. Azrieli Group | Adgar Investments vs. Migdal Insurance | Adgar Investments vs. Amot Investments |
| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. B Communications | Netz Hotels vs. Holmes Place International | Netz Hotels vs. Nova |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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