Correlation Between Dalata Hotel and Lennox International
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and Lennox International 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 Lennox International 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 Lennox International, you can compare the effects of market volatilities on Dalata Hotel and Lennox International 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 Lennox International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Lennox International.
Diversification Opportunities for Dalata Hotel and Lennox International
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dalata and Lennox is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Lennox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennox International 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 Lennox International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennox International has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Lennox International go up and down completely randomly.
Pair Corralation between Dalata Hotel and Lennox International
Assuming the 90 days horizon Dalata Hotel is expected to generate 1.24 times less return on investment than Lennox International. But when comparing it to its historical volatility, Dalata Hotel Group is 1.05 times less risky than Lennox International. It trades about 0.11 of its potential returns per unit of risk. Lennox International is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 59,903 in Lennox International on October 20, 2024 and sell it today you would earn a total of 2,257 from holding Lennox International or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalata Hotel Group vs. Lennox International
Performance |
| Timeline |
| Dalata Hotel Group |
| Lennox International |
Dalata Hotel and Lennox International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and Lennox International
The main advantage of trading using opposite Dalata Hotel and Lennox International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, Lennox International 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 Lennox International will offset losses from the drop in Lennox International's long position.| Dalata Hotel vs. ASURE SOFTWARE | Dalata Hotel vs. MAGIC SOFTWARE ENTR | Dalata Hotel vs. Major Drilling Group | Dalata Hotel vs. UPDATE SOFTWARE |
| Lennox International vs. ATRESMEDIA | Lennox International vs. Retail Estates NV | Lennox International vs. JIAHUA STORES | Lennox International vs. FAST RETAIL ADR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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