Correlation Between CIM FINANCIAL and CONSTANCE HOTELS
Can any of the company-specific risk be diversified away by investing in both CIM FINANCIAL and CONSTANCE 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 CIM FINANCIAL and CONSTANCE HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIM FINANCIAL SERVICES and CONSTANCE HOTELS SERVICES, you can compare the effects of market volatilities on CIM FINANCIAL and CONSTANCE 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 CIM FINANCIAL with a short position of CONSTANCE HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIM FINANCIAL and CONSTANCE HOTELS.
Diversification Opportunities for CIM FINANCIAL and CONSTANCE HOTELS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between CIM and CONSTANCE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CIM FINANCIAL SERVICES and CONSTANCE HOTELS SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTANCE HOTELS SERVICES and CIM FINANCIAL 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 CIM FINANCIAL SERVICES are associated (or correlated) with CONSTANCE HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTANCE HOTELS SERVICES has no effect on the direction of CIM FINANCIAL i.e., CIM FINANCIAL and CONSTANCE HOTELS go up and down completely randomly.
Pair Corralation between CIM FINANCIAL and CONSTANCE HOTELS
Assuming the 90 days trading horizon CIM FINANCIAL SERVICES is expected to generate 2.28 times more return on investment than CONSTANCE HOTELS. However, CIM FINANCIAL is 2.28 times more volatile than CONSTANCE HOTELS SERVICES. It trades about 0.04 of its potential returns per unit of risk. CONSTANCE HOTELS SERVICES is currently generating about 0.0 per unit of risk. If you would invest 927.00 in CIM FINANCIAL SERVICES on August 27, 2024 and sell it today you would earn a total of 323.00 from holding CIM FINANCIAL SERVICES or generate 34.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.71% |
| Values | Daily Returns |
CIM FINANCIAL SERVICES vs. CONSTANCE HOTELS SERVICES
Performance |
| Timeline |
| CIM FINANCIAL SERVICES |
| CONSTANCE HOTELS SERVICES |
CIM FINANCIAL and CONSTANCE HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIM FINANCIAL and CONSTANCE HOTELS
The main advantage of trading using opposite CIM FINANCIAL and CONSTANCE HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIM FINANCIAL position performs unexpectedly, CONSTANCE 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 CONSTANCE HOTELS will offset losses from the drop in CONSTANCE HOTELS's long position.| CIM FINANCIAL vs. MCB GROUP LTD | CIM FINANCIAL vs. LOTTOTECH LTD | CIM FINANCIAL vs. NEW MAURITIUS HOTELS | CIM FINANCIAL vs. MIWA SUGAR LIMITED |
| CONSTANCE HOTELS vs. PHOENIX INVESTMENT PANY | CONSTANCE HOTELS vs. UNITED INVESTMENTS LTD | CONSTANCE HOTELS vs. PHOENIX BEVERAGES LTD | CONSTANCE HOTELS vs. ASTORIA INVESTMENT LTD |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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