Correlation Between Avalon Holdings and InnSuites Hospitality
Can any of the company-specific risk be diversified away by investing in both Avalon Holdings and InnSuites 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 Avalon Holdings and InnSuites Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avalon Holdings and InnSuites Hospitality Trust, you can compare the effects of market volatilities on Avalon Holdings and InnSuites 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 Avalon Holdings with a short position of InnSuites Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avalon Holdings and InnSuites Hospitality.
Diversification Opportunities for Avalon Holdings and InnSuites Hospitality
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Avalon and InnSuites is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Avalon Holdings and InnSuites Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnSuites Hospitality and Avalon Holdings 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 Avalon Holdings are associated (or correlated) with InnSuites Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnSuites Hospitality has no effect on the direction of Avalon Holdings i.e., Avalon Holdings and InnSuites Hospitality go up and down completely randomly.
Pair Corralation between Avalon Holdings and InnSuites Hospitality
Considering the 90-day investment horizon Avalon Holdings is expected to generate 2.17 times more return on investment than InnSuites Hospitality. However, Avalon Holdings is 2.17 times more volatile than InnSuites Hospitality Trust. It trades about 0.19 of its potential returns per unit of risk. InnSuites Hospitality Trust is currently generating about 0.26 per unit of risk. If you would invest 267.00 in Avalon Holdings on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Avalon Holdings or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avalon Holdings vs. InnSuites Hospitality Trust
Performance |
| Timeline |
| Avalon Holdings |
| InnSuites Hospitality |
Avalon Holdings and InnSuites Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avalon Holdings and InnSuites Hospitality
The main advantage of trading using opposite Avalon Holdings and InnSuites Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avalon Holdings position performs unexpectedly, InnSuites 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 InnSuites Hospitality will offset losses from the drop in InnSuites Hospitality's long position.| Avalon Holdings vs. Agilyx AS | Avalon Holdings vs. BQE Water | Avalon Holdings vs. EcoPlus | Avalon Holdings vs. Anaergia |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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