Correlation Between Apple and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Apple and NH HOTEL 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 Apple and NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and NH HOTEL GROUP, you can compare the effects of market volatilities on Apple and NH HOTEL 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 Apple with a short position of NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and NH HOTEL.
Diversification Opportunities for Apple and NH HOTEL
Very weak diversification
The 3 months correlation between Apple and NH5 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP and Apple 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 Apple Inc are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Apple i.e., Apple and NH HOTEL go up and down completely randomly.
Pair Corralation between Apple and NH HOTEL
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.43 times more return on investment than NH HOTEL. However, Apple Inc is 2.31 times less risky than NH HOTEL. It trades about 0.23 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.0 per unit of risk. If you would invest 21,220 in Apple Inc on September 13, 2024 and sell it today you would earn a total of 2,495 from holding Apple Inc or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. NH HOTEL GROUP
Performance |
| Timeline |
| Apple Inc |
| NH HOTEL GROUP |
Apple and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and NH HOTEL
The main advantage of trading using opposite Apple and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Apple vs. Entravision Communications | Apple vs. NORTHEAST UTILITIES | Apple vs. Tower One Wireless | Apple vs. Highlight Communications AG |
| NH HOTEL vs. Mitsubishi Gas Chemical | NH HOTEL vs. Tsingtao Brewery | NH HOTEL vs. Nissan Chemical Corp | NH HOTEL vs. Silicon Motion Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |