Correlation Between CAR GROUP and Hotel Property
Can any of the company-specific risk be diversified away by investing in both CAR GROUP and Hotel Property 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 CAR GROUP and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAR GROUP LIMITED and Hotel Property Investments, you can compare the effects of market volatilities on CAR GROUP and Hotel Property 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 CAR GROUP with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAR GROUP and Hotel Property.
Diversification Opportunities for CAR GROUP and Hotel Property
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAR and Hotel is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CAR GROUP LIMITED and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and CAR GROUP 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 CAR GROUP LIMITED are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of CAR GROUP i.e., CAR GROUP and Hotel Property go up and down completely randomly.
Pair Corralation between CAR GROUP and Hotel Property
Assuming the 90 days trading horizon CAR GROUP LIMITED is expected to generate 7.59 times more return on investment than Hotel Property. However, CAR GROUP is 7.59 times more volatile than Hotel Property Investments. It trades about 0.39 of its potential returns per unit of risk. Hotel Property Investments is currently generating about 0.0 per unit of risk. If you would invest 3,649 in CAR GROUP LIMITED on November 3, 2024 and sell it today you would earn a total of 408.00 from holding CAR GROUP LIMITED or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAR GROUP LIMITED vs. Hotel Property Investments
Performance |
| Timeline |
| CAR GROUP LIMITED |
| Hotel Property Inves |
CAR GROUP and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAR GROUP and Hotel Property
The main advantage of trading using opposite CAR GROUP and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAR GROUP position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| CAR GROUP vs. Iron Road | CAR GROUP vs. Credit Clear | CAR GROUP vs. Mount Gibson Iron | CAR GROUP vs. Wt Financial Group |
| Hotel Property vs. Chalice Mining Limited | Hotel Property vs. Vulcan Steel | Hotel Property vs. Galena Mining | Hotel Property vs. The Environmental Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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