Correlation Between Banzai International and American Hotel
Can any of the company-specific risk be diversified away by investing in both Banzai International and American 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 Banzai International and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banzai International and American Hotel Income, you can compare the effects of market volatilities on Banzai International and American 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 Banzai International with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banzai International and American Hotel.
Diversification Opportunities for Banzai International and American Hotel
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Banzai and American is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Banzai International and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Banzai International 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 Banzai International are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Banzai International i.e., Banzai International and American Hotel go up and down completely randomly.
Pair Corralation between Banzai International and American Hotel
Given the investment horizon of 90 days Banzai International is expected to under-perform the American Hotel. In addition to that, Banzai International is 1.71 times more volatile than American Hotel Income. It trades about -0.24 of its total potential returns per unit of risk. American Hotel Income is currently generating about -0.16 per unit of volatility. If you would invest 44.00 in American Hotel Income on September 5, 2024 and sell it today you would lose (7.00) from holding American Hotel Income or give up 15.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banzai International vs. American Hotel Income
Performance |
| Timeline |
| Banzai International |
| American Hotel Income |
Banzai International and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banzai International and American Hotel
The main advantage of trading using opposite Banzai International and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banzai International position performs unexpectedly, American 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 American Hotel will offset losses from the drop in American Hotel's long position.| Banzai International vs. The Wendys Co | Banzai International vs. Ryman Hospitality Properties | Banzai International vs. BJs Restaurants | Banzai International vs. Coursera |
| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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