Correlation Between Les Hotels and NicOx SA
Can any of the company-specific risk be diversified away by investing in both Les Hotels and NicOx SA 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 Les Hotels and NicOx SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Les Hotels Bav and NicOx SA, you can compare the effects of market volatilities on Les Hotels and NicOx SA 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 Les Hotels with a short position of NicOx SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and NicOx SA.
Diversification Opportunities for Les Hotels and NicOx SA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Les and NicOx is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and NicOx SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NicOx SA and Les Hotels 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 Les Hotels Bav are associated (or correlated) with NicOx SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NicOx SA has no effect on the direction of Les Hotels i.e., Les Hotels and NicOx SA go up and down completely randomly.
Pair Corralation between Les Hotels and NicOx SA
Assuming the 90 days trading horizon Les Hotels Bav is expected to generate 0.28 times more return on investment than NicOx SA. However, Les Hotels Bav is 3.61 times less risky than NicOx SA. It trades about 0.07 of its potential returns per unit of risk. NicOx SA is currently generating about 0.0 per unit of risk. If you would invest 5,477 in Les Hotels Bav on September 20, 2024 and sell it today you would earn a total of 1,673 from holding Les Hotels Bav or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.63% |
| Values | Daily Returns |
Les Hotels Bav vs. NicOx SA
Performance |
| Timeline |
| Les Hotels Bav |
| NicOx SA |
Les Hotels and NicOx SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and NicOx SA
The main advantage of trading using opposite Les Hotels and NicOx SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, NicOx SA 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 NicOx SA will offset losses from the drop in NicOx SA's long position.| Les Hotels vs. SA Catana Group | Les Hotels vs. Verallia | Les Hotels vs. Thermador Groupe SA | Les Hotels vs. Maisons du Monde |
| NicOx SA vs. Groupe Pizzorno Environnement | NicOx SA vs. Novatech Industries SA | NicOx SA vs. Hotel Majestic Cannes | NicOx SA vs. Les Hotels Bav |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |