Correlation Between EMedia Holdings and City Lodge
Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and City Lodge 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 EMedia Holdings and City Lodge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMedia Holdings Limited and City Lodge Hotels, you can compare the effects of market volatilities on EMedia Holdings and City Lodge 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 EMedia Holdings with a short position of City Lodge. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and City Lodge.
Diversification Opportunities for EMedia Holdings and City Lodge
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between EMedia and City is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and City Lodge Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Lodge Hotels and EMedia Holdings 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 eMedia Holdings Limited are associated (or correlated) with City Lodge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Lodge Hotels has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and City Lodge go up and down completely randomly.
Pair Corralation between EMedia Holdings and City Lodge
Assuming the 90 days trading horizon eMedia Holdings Limited is expected to under-perform the City Lodge. In addition to that, EMedia Holdings is 1.59 times more volatile than City Lodge Hotels. It trades about -0.04 of its total potential returns per unit of risk. City Lodge Hotels is currently generating about 0.15 per unit of volatility. If you would invest 47,700 in City Lodge Hotels on September 1, 2024 and sell it today you would earn a total of 1,800 from holding City Lodge Hotels or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMedia Holdings Limited vs. City Lodge Hotels
Performance |
| Timeline |
| eMedia Holdings |
| City Lodge Hotels |
EMedia Holdings and City Lodge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMedia Holdings and City Lodge
The main advantage of trading using opposite EMedia Holdings and City Lodge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, City Lodge 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 City Lodge will offset losses from the drop in City Lodge's long position.| EMedia Holdings vs. MultiChoice Group | EMedia Holdings vs. Sasol Ltd Bee | EMedia Holdings vs. Growthpoint Properties | EMedia Holdings vs. AfricaRhodium ETF |
| City Lodge vs. Ascendis Health | City Lodge vs. British American Tobacco | City Lodge vs. Zeder Investments | City Lodge vs. Advtech |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |