Correlation Between DALATA HOTEL and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both DALATA HOTEL and NH HOTEL 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 NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DALATA HOTEL and NH HOTEL GROUP, you can compare the effects of market volatilities on DALATA HOTEL and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DALATA HOTEL and NH HOTEL.
Diversification Opportunities for DALATA HOTEL and NH HOTEL
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DALATA and NH5 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of DALATA HOTEL i.e., DALATA HOTEL and NH HOTEL go up and down completely randomly.
Pair Corralation between DALATA HOTEL and NH HOTEL
Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 2.91 times less return on investment than NH HOTEL. But when comparing it to its historical volatility, DALATA HOTEL is 1.71 times less risky than NH HOTEL. It trades about 0.1 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 408.00 in NH HOTEL GROUP on November 6, 2024 and sell it today you would earn a total of 206.00 from holding NH HOTEL GROUP or generate 50.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DALATA HOTEL vs. NH HOTEL GROUP
Performance |
| Timeline |
| DALATA HOTEL |
| NH HOTEL GROUP |
DALATA HOTEL and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DALATA HOTEL and NH HOTEL
The main advantage of trading using opposite DALATA HOTEL and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DALATA HOTEL position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| DALATA HOTEL vs. Harmony Gold Mining | DALATA HOTEL vs. De Grey Mining | DALATA HOTEL vs. THAI BEVERAGE | DALATA HOTEL vs. MAG SILVER |
| NH HOTEL vs. MOLSON RS BEVERAGE | NH HOTEL vs. MCEWEN MINING INC | NH HOTEL vs. STGEORGE MINING LTD | NH HOTEL vs. Tsingtao Brewery |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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