Correlation Between Batm Advanced and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and PPHE Hotel Group, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and PPHE Hotel.
Diversification Opportunities for Batm Advanced and PPHE Hotel
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Batm and PPHE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications 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 Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and PPHE Hotel go up and down completely randomly.
Pair Corralation between Batm Advanced and PPHE Hotel
Assuming the 90 days trading horizon Batm Advanced is expected to generate 2.75 times less return on investment than PPHE Hotel. In addition to that, Batm Advanced is 1.29 times more volatile than PPHE Hotel Group. It trades about 0.03 of its total potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.1 per unit of volatility. If you would invest 123,000 in PPHE Hotel Group on November 7, 2024 and sell it today you would earn a total of 13,000 from holding PPHE Hotel Group or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. PPHE Hotel Group
Performance |
| Timeline |
| Batm Advanced Commun |
| PPHE Hotel Group |
Batm Advanced and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and PPHE Hotel
The main advantage of trading using opposite Batm Advanced and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Heavitree Brewery | Batm Advanced vs. Datagroup SE | Batm Advanced vs. Fidelity National Information | Batm Advanced vs. Fevertree Drinks Plc |
| PPHE Hotel vs. Eastman Chemical Co | PPHE Hotel vs. EJF Investments | PPHE Hotel vs. Monks Investment Trust | PPHE Hotel vs. Vietnam Enterprise Investments |
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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