Correlation Between Dairy Farm and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Dairy Farm and Hyatt Hotels 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 Dairy Farm and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and Hyatt Hotels, you can compare the effects of market volatilities on Dairy Farm and Hyatt Hotels 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 Dairy Farm with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and Hyatt Hotels.
Diversification Opportunities for Dairy Farm and Hyatt Hotels
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dairy and Hyatt is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Dairy Farm 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 Dairy Farm International are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Dairy Farm i.e., Dairy Farm and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Dairy Farm and Hyatt Hotels
Assuming the 90 days trading horizon Dairy Farm International is expected to generate 0.91 times more return on investment than Hyatt Hotels. However, Dairy Farm International is 1.1 times less risky than Hyatt Hotels. It trades about -0.04 of its potential returns per unit of risk. Hyatt Hotels is currently generating about -0.13 per unit of risk. If you would invest 210.00 in Dairy Farm International on November 30, 2024 and sell it today you would lose (8.00) from holding Dairy Farm International or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Dairy Farm International vs. Hyatt Hotels
Performance |
| Timeline |
| Dairy Farm International |
| Hyatt Hotels |
Dairy Farm and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and Hyatt Hotels
The main advantage of trading using opposite Dairy Farm and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Dairy Farm vs. HK Electric Investments | Dairy Farm vs. Japan Asia Investment | Dairy Farm vs. De Grey Mining | Dairy Farm vs. Yunnan Water Investment |
| Hyatt Hotels vs. Micron Technology | Hyatt Hotels vs. Kingdee International Software | Hyatt Hotels vs. Casio Computer CoLtd | Hyatt Hotels vs. Easy Software AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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