Correlation Between General Shopping and Hotis Othon
Can any of the company-specific risk be diversified away by investing in both General Shopping and Hotis Othon 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 General Shopping and Hotis Othon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Shopping e and Hotis Othon SA, you can compare the effects of market volatilities on General Shopping and Hotis Othon 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 General Shopping with a short position of Hotis Othon. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Shopping and Hotis Othon.
Diversification Opportunities for General Shopping and Hotis Othon
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Hotis is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding General Shopping e and Hotis Othon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotis Othon SA and General Shopping 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 General Shopping e are associated (or correlated) with Hotis Othon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotis Othon SA has no effect on the direction of General Shopping i.e., General Shopping and Hotis Othon go up and down completely randomly.
Pair Corralation between General Shopping and Hotis Othon
Assuming the 90 days trading horizon General Shopping e is expected to under-perform the Hotis Othon. But the stock apears to be less risky and, when comparing its historical volatility, General Shopping e is 1.21 times less risky than Hotis Othon. The stock trades about -0.4 of its potential returns per unit of risk. The Hotis Othon SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 227.00 in Hotis Othon SA on August 27, 2024 and sell it today you would earn a total of 26.00 from holding Hotis Othon SA or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Shopping e vs. Hotis Othon SA
Performance |
| Timeline |
| General Shopping e |
| Hotis Othon SA |
General Shopping and Hotis Othon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Shopping and Hotis Othon
The main advantage of trading using opposite General Shopping and Hotis Othon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Shopping position performs unexpectedly, Hotis Othon 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 Hotis Othon will offset losses from the drop in Hotis Othon's long position.| General Shopping vs. Cognizant Technology Solutions | General Shopping vs. Marfrig Global Foods | General Shopping vs. Paycom Software | General Shopping vs. Extra Space Storage |
| Hotis Othon vs. Lupatech SA | Hotis Othon vs. Hrcules SA | Hotis Othon vs. HAGA SA Indstria | Hotis Othon vs. Bombril SA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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