Correlation Between Dalata Hotel and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and BW Offshore 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 Dalata Hotel and BW Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and BW Offshore, you can compare the effects of market volatilities on Dalata Hotel and BW Offshore 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 Dalata Hotel with a short position of BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and BW Offshore.
Diversification Opportunities for Dalata Hotel and BW Offshore
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dalata and 0RKH is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and BW Offshore go up and down completely randomly.
Pair Corralation between Dalata Hotel and BW Offshore
Assuming the 90 days trading horizon Dalata Hotel is expected to generate 3.92 times less return on investment than BW Offshore. But when comparing it to its historical volatility, Dalata Hotel Group is 1.06 times less risky than BW Offshore. It trades about 0.01 of its potential returns per unit of risk. BW Offshore is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,242 in BW Offshore on August 30, 2024 and sell it today you would earn a total of 511.00 from holding BW Offshore or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.24% |
| Values | Daily Returns |
Dalata Hotel Group vs. BW Offshore
Performance |
| Timeline |
| Dalata Hotel Group |
| BW Offshore |
Dalata Hotel and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and BW Offshore
The main advantage of trading using opposite Dalata Hotel and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Dalata Hotel vs. Ondine Biomedical | Dalata Hotel vs. Europa Metals | Dalata Hotel vs. Lendinvest PLC | Dalata Hotel vs. Neometals |
| BW Offshore vs. Lendinvest PLC | BW Offshore vs. Neometals | BW Offshore vs. Albion Technology General | BW Offshore vs. Jupiter Fund Management |
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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