Correlation Between Dalata Hotel and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and GigaMedia 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 GigaMedia 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 GigaMedia, you can compare the effects of market volatilities on Dalata Hotel and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and GigaMedia.
Diversification Opportunities for Dalata Hotel and GigaMedia
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dalata and GigaMedia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and GigaMedia go up and down completely randomly.
Pair Corralation between Dalata Hotel and GigaMedia
Assuming the 90 days horizon Dalata Hotel Group is expected to generate 1.26 times more return on investment than GigaMedia. However, Dalata Hotel is 1.26 times more volatile than GigaMedia. It trades about 0.03 of its potential returns per unit of risk. GigaMedia is currently generating about 0.03 per unit of risk. If you would invest 365.00 in Dalata Hotel Group on October 7, 2024 and sell it today you would earn a total of 98.00 from holding Dalata Hotel Group or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalata Hotel Group vs. GigaMedia
Performance |
| Timeline |
| Dalata Hotel Group |
| GigaMedia |
Dalata Hotel and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and GigaMedia
The main advantage of trading using opposite Dalata Hotel and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| Dalata Hotel vs. Marriott International | Dalata Hotel vs. Hyatt Hotels | Dalata Hotel vs. InterContinental Hotels Group | Dalata Hotel vs. INTERCONT HOTELS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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