Correlation Between Event Hospitality and Capitol Health
Can any of the company-specific risk be diversified away by investing in both Event Hospitality and Capitol Health 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 Event Hospitality and Capitol Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Event Hospitality and and Capitol Health, you can compare the effects of market volatilities on Event Hospitality and Capitol Health 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 Event Hospitality with a short position of Capitol Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Event Hospitality and Capitol Health.
Diversification Opportunities for Event Hospitality and Capitol Health
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Event and Capitol is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Event Hospitality and and Capitol Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Health and Event Hospitality 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 Event Hospitality and are associated (or correlated) with Capitol Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Health has no effect on the direction of Event Hospitality i.e., Event Hospitality and Capitol Health go up and down completely randomly.
Pair Corralation between Event Hospitality and Capitol Health
Assuming the 90 days trading horizon Event Hospitality and is expected to generate 0.38 times more return on investment than Capitol Health. However, Event Hospitality and is 2.61 times less risky than Capitol Health. It trades about 0.15 of its potential returns per unit of risk. Capitol Health is currently generating about -0.03 per unit of risk. If you would invest 1,099 in Event Hospitality and on August 28, 2024 and sell it today you would earn a total of 37.00 from holding Event Hospitality and or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Event Hospitality and vs. Capitol Health
Performance |
| Timeline |
| Event Hospitality |
| Capitol Health |
Event Hospitality and Capitol Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Event Hospitality and Capitol Health
The main advantage of trading using opposite Event Hospitality and Capitol Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Event Hospitality position performs unexpectedly, Capitol Health 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 Capitol Health will offset losses from the drop in Capitol Health's long position.| Event Hospitality vs. National Australia Bank | Event Hospitality vs. National Australia Bank | Event Hospitality vs. Westpac Banking | Event Hospitality vs. National Australia Bank |
| Capitol Health vs. Inventis | Capitol Health vs. PM Capital Global | Capitol Health vs. Macquarie Group Ltd | Capitol Health vs. Wam Leaders |
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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