Correlation Between FibraHotel and NOW
Can any of the company-specific risk be diversified away by investing in both FibraHotel and NOW 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 FibraHotel and NOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and NOW Inc, you can compare the effects of market volatilities on FibraHotel and NOW 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 FibraHotel with a short position of NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and NOW.
Diversification Opportunities for FibraHotel and NOW
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FibraHotel and NOW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc and FibraHotel 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 FibraHotel are associated (or correlated) with NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of FibraHotel i.e., FibraHotel and NOW go up and down completely randomly.
Pair Corralation between FibraHotel and NOW
Assuming the 90 days trading horizon FibraHotel is expected to under-perform the NOW. In addition to that, FibraHotel is 13.01 times more volatile than NOW Inc. It trades about -0.02 of its total potential returns per unit of risk. NOW Inc is currently generating about 0.03 per unit of volatility. If you would invest 23,400 in NOW Inc on August 31, 2024 and sell it today you would earn a total of 400.00 from holding NOW Inc or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibraHotel vs. NOW Inc
Performance |
| Timeline |
| FibraHotel |
| NOW Inc |
FibraHotel and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and NOW
The main advantage of trading using opposite FibraHotel and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| FibraHotel vs. Sony Group | FibraHotel vs. Barclays PLC | FibraHotel vs. HSBC Holdings plc | FibraHotel vs. Taiwan Semiconductor Manufacturing |
| NOW vs. First Majestic Silver | NOW vs. FibraHotel | NOW vs. Ameriprise Financial | NOW vs. Capital One Financial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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