Correlation Between Dan Hotels and Abra Information
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Abra Information 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 Dan Hotels and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Abra Information Technologies, you can compare the effects of market volatilities on Dan Hotels and Abra Information 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 Dan Hotels with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Abra Information.
Diversification Opportunities for Dan Hotels and Abra Information
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dan and Abra is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and Dan 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 Dan Hotels are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of Dan Hotels i.e., Dan Hotels and Abra Information go up and down completely randomly.
Pair Corralation between Dan Hotels and Abra Information
Assuming the 90 days trading horizon Dan Hotels is expected to generate 0.64 times more return on investment than Abra Information. However, Dan Hotels is 1.56 times less risky than Abra Information. It trades about -0.08 of its potential returns per unit of risk. Abra Information Technologies is currently generating about -0.34 per unit of risk. If you would invest 231,800 in Dan Hotels on August 29, 2024 and sell it today you would lose (5,300) from holding Dan Hotels or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Abra Information Technologies
Performance |
| Timeline |
| Dan Hotels |
| Abra Information Tec |
Dan Hotels and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Abra Information
The main advantage of trading using opposite Dan Hotels and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.| Dan Hotels vs. Direct Capital Investments | Dan Hotels vs. Safe T Group | Dan Hotels vs. Israel China Biotechnology | Dan Hotels vs. Biomedix Incubator |
| Abra Information vs. Automatic Bank Services | Abra Information vs. EN Shoham Business | Abra Information vs. Rapac Communication Infrastructure | Abra Information vs. Tadiran Hldg |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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