Correlation Between Alumina Limited and Hersha Hospitality
Can any of the company-specific risk be diversified away by investing in both Alumina Limited and Hersha Hospitality 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 Alumina Limited and Hersha Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumina Limited PK and Hersha Hospitality Trust, you can compare the effects of market volatilities on Alumina Limited and Hersha Hospitality 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 Alumina Limited with a short position of Hersha Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumina Limited and Hersha Hospitality.
Diversification Opportunities for Alumina Limited and Hersha Hospitality
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alumina and Hersha is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alumina Limited PK and Hersha Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hersha Hospitality Trust and Alumina Limited 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 Alumina Limited PK are associated (or correlated) with Hersha Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hersha Hospitality Trust has no effect on the direction of Alumina Limited i.e., Alumina Limited and Hersha Hospitality go up and down completely randomly.
Pair Corralation between Alumina Limited and Hersha Hospitality
If you would invest 611.00 in Hersha Hospitality Trust on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Hersha Hospitality Trust or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alumina Limited PK vs. Hersha Hospitality Trust
Performance |
| Timeline |
| Alumina Limited PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hersha Hospitality Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alumina Limited and Hersha Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumina Limited and Hersha Hospitality
The main advantage of trading using opposite Alumina Limited and Hersha Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumina Limited position performs unexpectedly, Hersha Hospitality 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 Hersha Hospitality will offset losses from the drop in Hersha Hospitality's long position.| Alumina Limited vs. Anhui Conch Cement | Alumina Limited vs. Asahi Kaisei Corp | Alumina Limited vs. Covestro ADR |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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