Correlation Between Les Hotels and Les Htels
Can any of the company-specific risk be diversified away by investing in both Les Hotels and Les Htels 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 Les Htels 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 Les Htels de, you can compare the effects of market volatilities on Les Hotels and Les Htels 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 Les Htels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Les Htels.
Diversification Opportunities for Les Hotels and Les Htels
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Les and Les is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Les Htels de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Htels de 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 Les Htels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Htels de has no effect on the direction of Les Hotels i.e., Les Hotels and Les Htels go up and down completely randomly.
Pair Corralation between Les Hotels and Les Htels
Assuming the 90 days trading horizon Les Hotels is expected to generate 2.51 times less return on investment than Les Htels. But when comparing it to its historical volatility, Les Hotels Bav is 3.07 times less risky than Les Htels. It trades about 0.04 of its potential returns per unit of risk. Les Htels de is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Les Htels de on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Les Htels de or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.26% |
| Values | Daily Returns |
Les Hotels Bav vs. Les Htels de
Performance |
| Timeline |
| Les Hotels Bav |
| Les Htels de |
Les Hotels and Les Htels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Les Htels
The main advantage of trading using opposite Les Hotels and Les Htels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, Les Htels 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 Les Htels will offset losses from the drop in Les Htels' long position.| Les Hotels vs. SA Catana Group | Les Hotels vs. Reworld Media | Les Hotels vs. Biosynex | Les Hotels vs. Moulinvest |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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