Correlation Between Dalata Hotel and Kenmare Resources
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and Kenmare Resources 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 Kenmare Resources 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 Kenmare Resources PLC, you can compare the effects of market volatilities on Dalata Hotel and Kenmare Resources 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 Kenmare Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Kenmare Resources.
Diversification Opportunities for Dalata Hotel and Kenmare Resources
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dalata and Kenmare is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Kenmare Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenmare Resources PLC 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 Kenmare Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenmare Resources PLC has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Kenmare Resources go up and down completely randomly.
Pair Corralation between Dalata Hotel and Kenmare Resources
Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 0.69 times more return on investment than Kenmare Resources. However, Dalata Hotel Group is 1.45 times less risky than Kenmare Resources. It trades about 0.07 of its potential returns per unit of risk. Kenmare Resources PLC is currently generating about -0.07 per unit of risk. If you would invest 472.00 in Dalata Hotel Group on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Dalata Hotel Group or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalata Hotel Group vs. Kenmare Resources PLC
Performance |
| Timeline |
| Dalata Hotel Group |
| Kenmare Resources PLC |
Dalata Hotel and Kenmare Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and Kenmare Resources
The main advantage of trading using opposite Dalata Hotel and Kenmare Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, Kenmare Resources 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 Kenmare Resources will offset losses from the drop in Kenmare Resources' long position.| Dalata Hotel vs. AIB Group PLC | Dalata Hotel vs. Bank of Ireland | Dalata Hotel vs. Kingspan Group plc | Dalata Hotel vs. Irish Residential Properties |
| Kenmare Resources vs. AIB Group PLC | Kenmare Resources vs. Dalata Hotel Group | Kenmare Resources vs. Uniphar Group PLC | Kenmare Resources vs. Greencoat Renewables PLC |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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