Correlation Between Global Health and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Global Health and Hotel Property 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 Global Health and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and Hotel Property Investments, you can compare the effects of market volatilities on Global Health and Hotel Property 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 Global Health with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Hotel Property.
Diversification Opportunities for Global Health and Hotel Property
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Hotel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and Global Health 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 Global Health are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Global Health i.e., Global Health and Hotel Property go up and down completely randomly.
Pair Corralation between Global Health and Hotel Property
Assuming the 90 days trading horizon Global Health is expected to generate 24.18 times more return on investment than Hotel Property. However, Global Health is 24.18 times more volatile than Hotel Property Investments. It trades about 0.02 of its potential returns per unit of risk. Hotel Property Investments is currently generating about 0.0 per unit of risk. If you would invest 14.00 in Global Health on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Global Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. Hotel Property Investments
Performance |
| Timeline |
| Global Health |
| Hotel Property Inves |
Global Health and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Hotel Property
The main advantage of trading using opposite Global Health and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| Global Health vs. Aneka Tambang Tbk | Global Health vs. BHP Group Limited | Global Health vs. Rio Tinto | Global Health vs. Macquarie Group Ltd |
| Hotel Property vs. Flagship Investments | Hotel Property vs. Hudson Investment Group | Hotel Property vs. National Storage REIT | Hotel Property vs. Retail Food Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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