Correlation Between American Hotel and Massachusetts Electric
Can any of the company-specific risk be diversified away by investing in both American Hotel and Massachusetts Electric 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 American Hotel and Massachusetts Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Massachusetts Electric, you can compare the effects of market volatilities on American Hotel and Massachusetts Electric 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 American Hotel with a short position of Massachusetts Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Massachusetts Electric.
Diversification Opportunities for American Hotel and Massachusetts Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Massachusetts is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Massachusetts Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Electric and American Hotel 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 American Hotel Income are associated (or correlated) with Massachusetts Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Electric has no effect on the direction of American Hotel i.e., American Hotel and Massachusetts Electric go up and down completely randomly.
Pair Corralation between American Hotel and Massachusetts Electric
If you would invest 43.00 in American Hotel Income on October 28, 2024 and sell it today you would earn a total of 1.00 from holding American Hotel Income or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Hotel Income vs. Massachusetts Electric
Performance |
| Timeline |
| American Hotel Income |
| Massachusetts Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Hotel and Massachusetts Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Massachusetts Electric
The main advantage of trading using opposite American Hotel and Massachusetts Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Massachusetts Electric 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 Massachusetts Electric will offset losses from the drop in Massachusetts Electric's long position.| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Braemar Hotels Resorts | American Hotel vs. Braemar Hotels Resorts |
| Massachusetts Electric vs. Thor Industries | Massachusetts Electric vs. Mitsubishi UFJ Lease | Massachusetts Electric vs. Warner Music Group | Massachusetts Electric vs. Playstudios |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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