Correlation Between UniCredit SpA and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and NH HOTEL 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 UniCredit SpA and NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and NH HOTEL GROUP, you can compare the effects of market volatilities on UniCredit SpA and NH HOTEL 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 UniCredit SpA with a short position of NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and NH HOTEL.
Diversification Opportunities for UniCredit SpA and NH HOTEL
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UniCredit and NH5 is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP and UniCredit SpA 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 UniCredit SpA are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and NH HOTEL go up and down completely randomly.
Pair Corralation between UniCredit SpA and NH HOTEL
Assuming the 90 days trading horizon UniCredit SpA is expected to under-perform the NH HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, UniCredit SpA is 1.32 times less risky than NH HOTEL. The stock trades about -0.18 of its potential returns per unit of risk. The NH HOTEL GROUP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 413.00 in NH HOTEL GROUP on September 1, 2024 and sell it today you would lose (2.00) from holding NH HOTEL GROUP or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
UniCredit SpA vs. NH HOTEL GROUP
Performance |
| Timeline |
| UniCredit SpA |
| NH HOTEL GROUP |
UniCredit SpA and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and NH HOTEL
The main advantage of trading using opposite UniCredit SpA and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| UniCredit SpA vs. NH HOTEL GROUP | UniCredit SpA vs. CARSALESCOM | UniCredit SpA vs. MUTUIONLINE | UniCredit SpA vs. Lamar Advertising |
| NH HOTEL vs. SIVERS SEMICONDUCTORS AB | NH HOTEL vs. Darden Restaurants | NH HOTEL vs. Reliance Steel Aluminum | NH HOTEL vs. Q2M Managementberatung AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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