Correlation Between Bio View and Netz Hotels
Can any of the company-specific risk be diversified away by investing in both Bio View and Netz Hotels 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 Bio View and Netz Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio View and Netz Hotels, you can compare the effects of market volatilities on Bio View and Netz Hotels 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 Bio View with a short position of Netz Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio View and Netz Hotels.
Diversification Opportunities for Bio View and Netz Hotels
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bio and Netz is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bio View and Netz Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netz Hotels and Bio View 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 Bio View are associated (or correlated) with Netz Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netz Hotels has no effect on the direction of Bio View i.e., Bio View and Netz Hotels go up and down completely randomly.
Pair Corralation between Bio View and Netz Hotels
Assuming the 90 days trading horizon Bio View is expected to under-perform the Netz Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Bio View is 1.06 times less risky than Netz Hotels. The stock trades about -0.07 of its potential returns per unit of risk. The Netz Hotels is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,370 in Netz Hotels on August 26, 2024 and sell it today you would lose (2,190) from holding Netz Hotels or give up 40.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio View vs. Netz Hotels
Performance |
| Timeline |
| Bio View |
| Netz Hotels |
Bio View and Netz Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio View and Netz Hotels
The main advantage of trading using opposite Bio View and Netz Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio View position performs unexpectedly, Netz Hotels 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 Netz Hotels will offset losses from the drop in Netz Hotels' long position.| Bio View vs. Netz Hotels | Bio View vs. Migdal Insurance | Bio View vs. Harel Insurance Investments | Bio View vs. Menora Miv Hld |
| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Brainsway | Netz Hotels vs. Mivne Real Estate | Netz Hotels vs. Photomyne |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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