Correlation Between Dalata Hotel and Equinix
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and Equinix 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 Dalata Hotel and Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and Equinix, you can compare the effects of market volatilities on Dalata Hotel and Equinix 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 Dalata Hotel with a short position of Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Equinix.
Diversification Opportunities for Dalata Hotel and Equinix
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalata and Equinix is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Equinix go up and down completely randomly.
Pair Corralation between Dalata Hotel and Equinix
Assuming the 90 days horizon Dalata Hotel is expected to generate 1.44 times less return on investment than Equinix. In addition to that, Dalata Hotel is 1.22 times more volatile than Equinix. It trades about 0.12 of its total potential returns per unit of risk. Equinix is currently generating about 0.21 per unit of volatility. If you would invest 78,029 in Equinix on September 12, 2024 and sell it today you would earn a total of 14,891 from holding Equinix or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalata Hotel Group vs. Equinix
Performance |
| Timeline |
| Dalata Hotel Group |
| Equinix |
Dalata Hotel and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and Equinix
The main advantage of trading using opposite Dalata Hotel and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| Dalata Hotel vs. Focus Home Interactive | Dalata Hotel vs. Addus HomeCare | Dalata Hotel vs. LION ONE METALS | Dalata Hotel vs. Haverty Furniture Companies |
| Equinix vs. GigaMedia | Equinix vs. TOWNSQUARE MEDIA INC | Equinix vs. Q2M Managementberatung AG | Equinix vs. LANDSEA GREEN MANAGEMENT |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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