Correlation Between Alphabet and Atour Lifestyle
Can any of the company-specific risk be diversified away by investing in both Alphabet and Atour Lifestyle 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 Alphabet and Atour Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and Atour Lifestyle Holdings, you can compare the effects of market volatilities on Alphabet and Atour Lifestyle 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 Alphabet with a short position of Atour Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Atour Lifestyle.
Diversification Opportunities for Alphabet and Atour Lifestyle
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alphabet and Atour is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Atour Lifestyle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atour Lifestyle Holdings and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Atour Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atour Lifestyle Holdings has no effect on the direction of Alphabet i.e., Alphabet and Atour Lifestyle go up and down completely randomly.
Pair Corralation between Alphabet and Atour Lifestyle
Given the investment horizon of 90 days Alphabet is expected to generate 1.34 times less return on investment than Atour Lifestyle. But when comparing it to its historical volatility, Alphabet Inc Class C is 2.06 times less risky than Atour Lifestyle. It trades about 0.07 of its potential returns per unit of risk. Atour Lifestyle Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Atour Lifestyle Holdings on August 27, 2024 and sell it today you would earn a total of 987.00 from holding Atour Lifestyle Holdings or generate 64.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Atour Lifestyle Holdings
Performance |
| Timeline |
| Alphabet Class C |
| Atour Lifestyle Holdings |
Alphabet and Atour Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Atour Lifestyle
The main advantage of trading using opposite Alphabet and Atour Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Atour Lifestyle 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 Atour Lifestyle will offset losses from the drop in Atour Lifestyle's long position.The idea behind Alphabet Inc Class C and Atour Lifestyle Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atour Lifestyle vs. InterContinental Hotels Group | Atour Lifestyle vs. GreenTree Hospitality Group | Atour Lifestyle vs. Hyatt Hotels | Atour Lifestyle vs. Choice Hotels International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |