Correlation Between Dan Hotels and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Batm Advanced 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 Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Batm Advanced Communications, you can compare the effects of market volatilities on Dan Hotels and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Batm Advanced.
Diversification Opportunities for Dan Hotels and Batm Advanced
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dan and Batm is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Dan Hotels i.e., Dan Hotels and Batm Advanced go up and down completely randomly.
Pair Corralation between Dan Hotels and Batm Advanced
Assuming the 90 days trading horizon Dan Hotels is expected to generate 0.81 times more return on investment than Batm Advanced. However, Dan Hotels is 1.24 times less risky than Batm Advanced. It trades about -0.1 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about -0.08 per unit of risk. If you would invest 231,800 in Dan Hotels on August 31, 2024 and sell it today you would lose (6,800) from holding Dan Hotels or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Batm Advanced Communications
Performance |
| Timeline |
| Dan Hotels |
| Batm Advanced Commun |
Dan Hotels and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Batm Advanced
The main advantage of trading using opposite Dan Hotels and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Dan Hotels vs. El Al Israel | Dan Hotels vs. Magic Software Enterprises | Dan Hotels vs. Neto Malinda | Dan Hotels vs. Orbit Technologies |
| Batm Advanced vs. Storage Drop Storage | Batm Advanced vs. Brainsway | Batm Advanced vs. Mivne Real Estate | Batm Advanced vs. Photomyne |
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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