Correlation Between Clime Investment and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Clime Investment 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 Clime Investment and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clime Investment Management and Hotel Property Investments, you can compare the effects of market volatilities on Clime Investment 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 Clime Investment with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and Hotel Property.
Diversification Opportunities for Clime Investment and Hotel Property
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clime and Hotel is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management 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 Clime Investment 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 Clime Investment Management 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 Clime Investment i.e., Clime Investment and Hotel Property go up and down completely randomly.
Pair Corralation between Clime Investment and Hotel Property
Assuming the 90 days trading horizon Clime Investment is expected to generate 18.57 times less return on investment than Hotel Property. In addition to that, Clime Investment is 1.66 times more volatile than Hotel Property Investments. It trades about 0.0 of its total potential returns per unit of risk. Hotel Property Investments is currently generating about 0.06 per unit of volatility. If you would invest 288.00 in Hotel Property Investments on August 28, 2024 and sell it today you would earn a total of 84.00 from holding Hotel Property Investments or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Clime Investment Management vs. Hotel Property Investments
Performance |
| Timeline |
| Clime Investment Man |
| Hotel Property Inves |
Clime Investment and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clime Investment and Hotel Property
The main advantage of trading using opposite Clime Investment and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment 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.| Clime Investment vs. National Australia Bank | Clime Investment vs. National Australia Bank | Clime Investment vs. Westpac Banking | Clime Investment vs. National Australia Bank |
| Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Cromwell Property 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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