Correlation Between Mast Global and Defiance Hotel
Can any of the company-specific risk be diversified away by investing in both Mast Global and Defiance 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 Mast Global and Defiance Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mast Global Battery and Defiance Hotel Airline, you can compare the effects of market volatilities on Mast Global and Defiance 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 Mast Global with a short position of Defiance Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and Defiance Hotel.
Diversification Opportunities for Mast Global and Defiance Hotel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mast and Defiance is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and Defiance Hotel Airline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Hotel Airline and Mast Global 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 Mast Global Battery are associated (or correlated) with Defiance Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Hotel Airline has no effect on the direction of Mast Global i.e., Mast Global and Defiance Hotel go up and down completely randomly.
Pair Corralation between Mast Global and Defiance Hotel
Allowing for the 90-day total investment horizon Mast Global Battery is expected to under-perform the Defiance Hotel. In addition to that, Mast Global is 1.46 times more volatile than Defiance Hotel Airline. It trades about -0.03 of its total potential returns per unit of risk. Defiance Hotel Airline is currently generating about 0.44 per unit of volatility. If you would invest 2,456 in Defiance Hotel Airline on September 3, 2024 and sell it today you would earn a total of 238.00 from holding Defiance Hotel Airline or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mast Global Battery vs. Defiance Hotel Airline
Performance |
| Timeline |
| Mast Global Battery |
| Defiance Hotel Airline |
Mast Global and Defiance Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mast Global and Defiance Hotel
The main advantage of trading using opposite Mast Global and Defiance Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mast Global position performs unexpectedly, Defiance 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 Defiance Hotel will offset losses from the drop in Defiance Hotel's long position.| Mast Global vs. iShares Dividend and | Mast Global vs. Martin Currie Sustainable | Mast Global vs. VictoryShares THB Mid | Mast Global vs. AdvisorShares Gerber Kawasaki |
| Defiance Hotel vs. iShares Dividend and | Defiance Hotel vs. Martin Currie Sustainable | Defiance Hotel vs. VictoryShares THB Mid | Defiance Hotel vs. Mast Global Battery |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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