Correlation Between FibraHotel and Starbucks
Can any of the company-specific risk be diversified away by investing in both FibraHotel and Starbucks 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 Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Starbucks, you can compare the effects of market volatilities on FibraHotel and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Starbucks.
Diversification Opportunities for FibraHotel and Starbucks
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FibraHotel and Starbucks is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of FibraHotel i.e., FibraHotel and Starbucks go up and down completely randomly.
Pair Corralation between FibraHotel and Starbucks
Assuming the 90 days trading horizon FibraHotel is expected to under-perform the Starbucks. In addition to that, FibraHotel is 1.24 times more volatile than Starbucks. It trades about -0.05 of its total potential returns per unit of risk. Starbucks is currently generating about 0.2 per unit of volatility. If you would invest 193,719 in Starbucks on September 3, 2024 and sell it today you would earn a total of 14,781 from holding Starbucks or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibraHotel vs. Starbucks
Performance |
| Timeline |
| FibraHotel |
| Starbucks |
FibraHotel and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Starbucks
The main advantage of trading using opposite FibraHotel and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| FibraHotel vs. Amazon Inc | FibraHotel vs. The Select Sector | FibraHotel vs. Promotora y Operadora | FibraHotel vs. SPDR Series Trust |
| Starbucks vs. Monster Beverage Corp | Starbucks vs. McEwen Mining | Starbucks vs. Grupo Sports World | Starbucks vs. Verizon Communications |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |