Correlation Between CONSTANCE HOTELS and PHOENIX BEVERAGES
Can any of the company-specific risk be diversified away by investing in both CONSTANCE HOTELS and PHOENIX BEVERAGES 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 CONSTANCE HOTELS and PHOENIX BEVERAGES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONSTANCE HOTELS SERVICES and PHOENIX BEVERAGES LTD, you can compare the effects of market volatilities on CONSTANCE HOTELS and PHOENIX BEVERAGES 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 CONSTANCE HOTELS with a short position of PHOENIX BEVERAGES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSTANCE HOTELS and PHOENIX BEVERAGES.
Diversification Opportunities for CONSTANCE HOTELS and PHOENIX BEVERAGES
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CONSTANCE and PHOENIX is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CONSTANCE HOTELS SERVICES and PHOENIX BEVERAGES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX BEVERAGES LTD and CONSTANCE HOTELS 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 CONSTANCE HOTELS SERVICES are associated (or correlated) with PHOENIX BEVERAGES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX BEVERAGES LTD has no effect on the direction of CONSTANCE HOTELS i.e., CONSTANCE HOTELS and PHOENIX BEVERAGES go up and down completely randomly.
Pair Corralation between CONSTANCE HOTELS and PHOENIX BEVERAGES
If you would invest 53,500 in PHOENIX BEVERAGES LTD on September 1, 2024 and sell it today you would earn a total of 200.00 from holding PHOENIX BEVERAGES LTD or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONSTANCE HOTELS SERVICES vs. PHOENIX BEVERAGES LTD
Performance |
| Timeline |
| CONSTANCE HOTELS SERVICES |
| PHOENIX BEVERAGES LTD |
CONSTANCE HOTELS and PHOENIX BEVERAGES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONSTANCE HOTELS and PHOENIX BEVERAGES
The main advantage of trading using opposite CONSTANCE HOTELS and PHOENIX BEVERAGES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSTANCE HOTELS position performs unexpectedly, PHOENIX BEVERAGES 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 PHOENIX BEVERAGES will offset losses from the drop in PHOENIX BEVERAGES's long position.| CONSTANCE HOTELS vs. FINCORP INVESTMENT LTD | CONSTANCE HOTELS vs. MCB GROUP LTD | CONSTANCE HOTELS vs. CAUDAN DEVELOPMENT LTD | CONSTANCE HOTELS vs. SUN LIMITED |
| PHOENIX BEVERAGES vs. FINCORP INVESTMENT LTD | PHOENIX BEVERAGES vs. MCB GROUP LTD | PHOENIX BEVERAGES vs. CAUDAN DEVELOPMENT LTD | PHOENIX BEVERAGES vs. SUN LIMITED |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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