Correlation Between Bolsa Mexicana and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both Bolsa Mexicana and PPHE 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 Bolsa Mexicana and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bolsa Mexicana de and PPHE HOTEL GROUP, you can compare the effects of market volatilities on Bolsa Mexicana and PPHE 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 Bolsa Mexicana with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsa Mexicana and PPHE HOTEL.
Diversification Opportunities for Bolsa Mexicana and PPHE HOTEL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bolsa and PPHE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bolsa Mexicana de and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and Bolsa Mexicana 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 Bolsa Mexicana de are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of Bolsa Mexicana i.e., Bolsa Mexicana and PPHE HOTEL go up and down completely randomly.
Pair Corralation between Bolsa Mexicana and PPHE HOTEL
Assuming the 90 days trading horizon Bolsa Mexicana de is expected to under-perform the PPHE HOTEL. In addition to that, Bolsa Mexicana is 1.62 times more volatile than PPHE HOTEL GROUP. It trades about -0.05 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.06 per unit of volatility. If you would invest 1,400 in PPHE HOTEL GROUP on October 26, 2024 and sell it today you would earn a total of 60.00 from holding PPHE HOTEL GROUP or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Bolsa Mexicana de vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| Bolsa Mexicana de |
| PPHE HOTEL GROUP |
Bolsa Mexicana and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bolsa Mexicana and PPHE HOTEL
The main advantage of trading using opposite Bolsa Mexicana and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolsa Mexicana position performs unexpectedly, PPHE 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| Bolsa Mexicana vs. NORWEGIAN AIR SHUT | Bolsa Mexicana vs. CHINA SOUTHN AIR H | Bolsa Mexicana vs. DATAGROUP SE | Bolsa Mexicana vs. DATATEC LTD 2 |
| PPHE HOTEL vs. CITY OFFICE REIT | PPHE HOTEL vs. Tower One Wireless | PPHE HOTEL vs. SLR Investment Corp | PPHE HOTEL vs. ECHO INVESTMENT ZY |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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