Correlation Between FINCORP INVESTMENT and HOTELEST
Can any of the company-specific risk be diversified away by investing in both FINCORP INVESTMENT and HOTELEST 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 FINCORP INVESTMENT and HOTELEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FINCORP INVESTMENT LTD and HOTELEST LTD, you can compare the effects of market volatilities on FINCORP INVESTMENT and HOTELEST 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 FINCORP INVESTMENT with a short position of HOTELEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and HOTELEST.
Diversification Opportunities for FINCORP INVESTMENT and HOTELEST
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FINCORP and HOTELEST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and HOTELEST LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOTELEST LTD and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with HOTELEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOTELEST LTD has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and HOTELEST go up and down completely randomly.
Pair Corralation between FINCORP INVESTMENT and HOTELEST
Assuming the 90 days trading horizon FINCORP INVESTMENT LTD is expected to generate 2.27 times more return on investment than HOTELEST. However, FINCORP INVESTMENT is 2.27 times more volatile than HOTELEST LTD. It trades about 0.01 of its potential returns per unit of risk. HOTELEST LTD is currently generating about -0.05 per unit of risk. If you would invest 1,660 in FINCORP INVESTMENT LTD on August 28, 2024 and sell it today you would earn a total of 5.00 from holding FINCORP INVESTMENT LTD or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FINCORP INVESTMENT LTD vs. HOTELEST LTD
Performance |
| Timeline |
| FINCORP INVESTMENT LTD |
| HOTELEST LTD |
FINCORP INVESTMENT and HOTELEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FINCORP INVESTMENT and HOTELEST
The main advantage of trading using opposite FINCORP INVESTMENT and HOTELEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FINCORP INVESTMENT position performs unexpectedly, HOTELEST 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 HOTELEST will offset losses from the drop in HOTELEST's long position.| FINCORP INVESTMENT vs. MCB GROUP LTD | FINCORP INVESTMENT vs. LOTTOTECH LTD | FINCORP INVESTMENT vs. NEW MAURITIUS HOTELS | FINCORP INVESTMENT vs. MIWA SUGAR LIMITED |
| HOTELEST vs. MCB GROUP LTD | HOTELEST vs. LOTTOTECH LTD | HOTELEST vs. NEW MAURITIUS HOTELS | HOTELEST vs. MIWA SUGAR LIMITED |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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