Correlation Between Arena Hospitality and KRA Dd
Can any of the company-specific risk be diversified away by investing in both Arena Hospitality and KRA Dd 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 Arena Hospitality and KRA Dd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Hospitality Group and KRA dd, you can compare the effects of market volatilities on Arena Hospitality and KRA Dd 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 Arena Hospitality with a short position of KRA Dd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Hospitality and KRA Dd.
Diversification Opportunities for Arena Hospitality and KRA Dd
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arena and KRA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Arena Hospitality Group and KRA dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRA dd and Arena Hospitality 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 Arena Hospitality Group are associated (or correlated) with KRA Dd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRA dd has no effect on the direction of Arena Hospitality i.e., Arena Hospitality and KRA Dd go up and down completely randomly.
Pair Corralation between Arena Hospitality and KRA Dd
Assuming the 90 days trading horizon Arena Hospitality is expected to generate 1.04 times less return on investment than KRA Dd. But when comparing it to its historical volatility, Arena Hospitality Group is 2.09 times less risky than KRA Dd. It trades about 0.26 of its potential returns per unit of risk. KRA dd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 11,000 in KRA dd on November 2, 2024 and sell it today you would earn a total of 300.00 from holding KRA dd or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Arena Hospitality Group vs. KRA dd
Performance |
| Timeline |
| Arena Hospitality |
| KRA dd |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Arena Hospitality and KRA Dd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Hospitality and KRA Dd
The main advantage of trading using opposite Arena Hospitality and KRA Dd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Hospitality position performs unexpectedly, KRA Dd 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 KRA Dd will offset losses from the drop in KRA Dd's long position.| Arena Hospitality vs. Dalekovod dd | Arena Hospitality vs. INA Industrija Nafte dd | Arena Hospitality vs. Zagrebacka Banka dd | Arena Hospitality vs. Podravka Prehrambena Industrija |
| KRA Dd vs. Dalekovod dd | KRA Dd vs. Institut IGH dd | KRA Dd vs. Jadroplov dd | KRA Dd vs. Zagrebacka Banka dd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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