Correlation Between Ferm Casino and Hoteles Bestprice
Can any of the company-specific risk be diversified away by investing in both Ferm Casino and Hoteles Bestprice 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 Ferm Casino and Hoteles Bestprice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferm Casino Mun and Hoteles Bestprice SA, you can compare the effects of market volatilities on Ferm Casino and Hoteles Bestprice 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 Ferm Casino with a short position of Hoteles Bestprice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferm Casino and Hoteles Bestprice.
Diversification Opportunities for Ferm Casino and Hoteles Bestprice
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ferm and Hoteles is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ferm Casino Mun and Hoteles Bestprice SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoteles Bestprice and Ferm Casino 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 Ferm Casino Mun are associated (or correlated) with Hoteles Bestprice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoteles Bestprice has no effect on the direction of Ferm Casino i.e., Ferm Casino and Hoteles Bestprice go up and down completely randomly.
Pair Corralation between Ferm Casino and Hoteles Bestprice
Assuming the 90 days trading horizon Ferm Casino Mun is expected to generate 0.81 times more return on investment than Hoteles Bestprice. However, Ferm Casino Mun is 1.24 times less risky than Hoteles Bestprice. It trades about 0.0 of its potential returns per unit of risk. Hoteles Bestprice SA is currently generating about -0.14 per unit of risk. If you would invest 150,000 in Ferm Casino Mun on September 1, 2024 and sell it today you would lose (2,000) from holding Ferm Casino Mun or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferm Casino Mun vs. Hoteles Bestprice SA
Performance |
| Timeline |
| Ferm Casino Mun |
| Hoteles Bestprice |
Ferm Casino and Hoteles Bestprice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferm Casino and Hoteles Bestprice
The main advantage of trading using opposite Ferm Casino and Hoteles Bestprice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferm Casino position performs unexpectedly, Hoteles Bestprice 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 Hoteles Bestprice will offset losses from the drop in Hoteles Bestprice's long position.| Ferm Casino vs. Groupe Partouche SA | Ferm Casino vs. Bains Mer Monaco | Ferm Casino vs. Malteries Franco Belges Socit | Ferm Casino vs. Robertet SA |
| Hoteles Bestprice vs. Les Hotels Bav | Hoteles Bestprice vs. Groupe Partouche SA | Hoteles Bestprice vs. Centrale dAchat Franaise | Hoteles Bestprice vs. Manitou BF SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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