Correlation Between Dan Hotels and Victory Supermarket
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Victory Supermarket 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 Victory Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Victory Supermarket Chain, you can compare the effects of market volatilities on Dan Hotels and Victory Supermarket 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 Victory Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Victory Supermarket.
Diversification Opportunities for Dan Hotels and Victory Supermarket
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dan and Victory is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain 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 Victory Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of Dan Hotels i.e., Dan Hotels and Victory Supermarket go up and down completely randomly.
Pair Corralation between Dan Hotels and Victory Supermarket
Assuming the 90 days trading horizon Dan Hotels is expected to generate 10.15 times less return on investment than Victory Supermarket. In addition to that, Dan Hotels is 2.08 times more volatile than Victory Supermarket Chain. It trades about 0.02 of its total potential returns per unit of risk. Victory Supermarket Chain is currently generating about 0.32 per unit of volatility. If you would invest 514,000 in Victory Supermarket Chain on September 18, 2024 and sell it today you would earn a total of 47,500 from holding Victory Supermarket Chain or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Dan Hotels vs. Victory Supermarket Chain
Performance |
| Timeline |
| Dan Hotels |
| Victory Supermarket Chain |
Dan Hotels and Victory Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Victory Supermarket
The main advantage of trading using opposite Dan Hotels and Victory Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Victory Supermarket 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 Victory Supermarket will offset losses from the drop in Victory Supermarket's long position.| Dan Hotels vs. Adgar Investments and | Dan Hotels vs. Amot Investments | Dan Hotels vs. Skyline Investments | Dan Hotels vs. Azorim Investment Development |
| Victory Supermarket vs. Rami Levi | Victory Supermarket vs. Neto ME Holdings | Victory Supermarket vs. Strauss Group | Victory Supermarket vs. Al Bad Massuot Yitzhak |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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