Correlation Between Dan Hotels and Menif Financial
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Menif Financial 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 Menif Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Menif Financial Services, you can compare the effects of market volatilities on Dan Hotels and Menif Financial 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 Menif Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Menif Financial.
Diversification Opportunities for Dan Hotels and Menif Financial
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dan and Menif is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Menif Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menif Financial Services 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 Menif Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menif Financial Services has no effect on the direction of Dan Hotels i.e., Dan Hotels and Menif Financial go up and down completely randomly.
Pair Corralation between Dan Hotels and Menif Financial
Assuming the 90 days trading horizon Dan Hotels is expected to under-perform the Menif Financial. But the stock apears to be less risky and, when comparing its historical volatility, Dan Hotels is 1.56 times less risky than Menif Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Menif Financial Services is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 147,103 in Menif Financial Services on September 1, 2024 and sell it today you would earn a total of 897.00 from holding Menif Financial Services or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Menif Financial Services
Performance |
| Timeline |
| Dan Hotels |
| Menif Financial Services |
Dan Hotels and Menif Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Menif Financial
The main advantage of trading using opposite Dan Hotels and Menif Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Menif Financial 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 Menif Financial will offset losses from the drop in Menif Financial'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 |
| Menif Financial vs. Isracard | Menif Financial vs. Jacob Finance And | Menif Financial vs. Bull Trading And |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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