Correlation Between Covivio Hotels and Mediantechn
Can any of the company-specific risk be diversified away by investing in both Covivio Hotels and Mediantechn 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 Covivio Hotels and Mediantechn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covivio Hotels and Mediantechn, you can compare the effects of market volatilities on Covivio Hotels and Mediantechn 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 Covivio Hotels with a short position of Mediantechn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covivio Hotels and Mediantechn.
Diversification Opportunities for Covivio Hotels and Mediantechn
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Covivio and Mediantechn is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Covivio Hotels and Mediantechn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediantechn and Covivio 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 Covivio Hotels are associated (or correlated) with Mediantechn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediantechn has no effect on the direction of Covivio Hotels i.e., Covivio Hotels and Mediantechn go up and down completely randomly.
Pair Corralation between Covivio Hotels and Mediantechn
Assuming the 90 days trading horizon Covivio Hotels is expected to generate 0.19 times more return on investment than Mediantechn. However, Covivio Hotels is 5.4 times less risky than Mediantechn. It trades about 0.04 of its potential returns per unit of risk. Mediantechn is currently generating about 0.0 per unit of risk. If you would invest 1,599 in Covivio Hotels on August 31, 2024 and sell it today you would earn a total of 271.00 from holding Covivio Hotels or generate 16.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covivio Hotels vs. Mediantechn
Performance |
| Timeline |
| Covivio Hotels |
| Mediantechn |
Covivio Hotels and Mediantechn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covivio Hotels and Mediantechn
The main advantage of trading using opposite Covivio Hotels and Mediantechn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio Hotels position performs unexpectedly, Mediantechn 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 Mediantechn will offset losses from the drop in Mediantechn's long position.| Covivio Hotels vs. Altarea SCA | Covivio Hotels vs. Carmila SA | Covivio Hotels vs. Manitou BF SA | Covivio Hotels vs. Ossiam Minimum Variance |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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