Correlation Between Cleveland Cliffs and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Cleveland Cliffs and Grupo Hotelero 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 Cleveland Cliffs and Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleveland Cliffs and Grupo Hotelero Santa, you can compare the effects of market volatilities on Cleveland Cliffs and Grupo Hotelero 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 Cleveland Cliffs with a short position of Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleveland Cliffs and Grupo Hotelero.
Diversification Opportunities for Cleveland Cliffs and Grupo Hotelero
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cleveland and Grupo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland Cliffs and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa and Cleveland Cliffs 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 Cleveland Cliffs are associated (or correlated) with Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of Cleveland Cliffs i.e., Cleveland Cliffs and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Cleveland Cliffs and Grupo Hotelero
Assuming the 90 days trading horizon Cleveland Cliffs is expected to generate 1.69 times more return on investment than Grupo Hotelero. However, Cleveland Cliffs is 1.69 times more volatile than Grupo Hotelero Santa. It trades about -0.05 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about -0.27 per unit of risk. If you would invest 24,827 in Cleveland Cliffs on September 14, 2024 and sell it today you would lose (1,027) from holding Cleveland Cliffs or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleveland Cliffs vs. Grupo Hotelero Santa
Performance |
| Timeline |
| Cleveland Cliffs |
| Grupo Hotelero Santa |
Cleveland Cliffs and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleveland Cliffs and Grupo Hotelero
The main advantage of trading using opposite Cleveland Cliffs and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleveland Cliffs position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.| Cleveland Cliffs vs. Grupo Hotelero Santa | Cleveland Cliffs vs. GMxico Transportes SAB | Cleveland Cliffs vs. KB Home | Cleveland Cliffs vs. Genworth Financial |
| Grupo Hotelero vs. Verizon Communications | Grupo Hotelero vs. Applied Materials | Grupo Hotelero vs. Grupo Sports World | Grupo Hotelero vs. CVS Health |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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