Correlation Between Hoteles City and ProShares Trust
Can any of the company-specific risk be diversified away by investing in both Hoteles City and ProShares Trust 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 Hoteles City and ProShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoteles City Express and ProShares Trust , you can compare the effects of market volatilities on Hoteles City and ProShares Trust 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 Hoteles City with a short position of ProShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoteles City and ProShares Trust.
Diversification Opportunities for Hoteles City and ProShares Trust
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hoteles and ProShares is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hoteles City Express and ProShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Trust and Hoteles City 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 Hoteles City Express are associated (or correlated) with ProShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Trust has no effect on the direction of Hoteles City i.e., Hoteles City and ProShares Trust go up and down completely randomly.
Pair Corralation between Hoteles City and ProShares Trust
Assuming the 90 days trading horizon Hoteles City Express is expected to under-perform the ProShares Trust. But the stock apears to be less risky and, when comparing its historical volatility, Hoteles City Express is 1.13 times less risky than ProShares Trust. The stock trades about -0.05 of its potential returns per unit of risk. The ProShares Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 58,745 in ProShares Trust on August 31, 2024 and sell it today you would earn a total of 41,255 from holding ProShares Trust or generate 70.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Hoteles City Express vs. ProShares Trust
Performance |
| Timeline |
| Hoteles City Express |
| ProShares Trust |
Hoteles City and ProShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoteles City and ProShares Trust
The main advantage of trading using opposite Hoteles City and ProShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoteles City position performs unexpectedly, ProShares Trust 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 ProShares Trust will offset losses from the drop in ProShares Trust's long position.| Hoteles City vs. CEMEX SAB de | Hoteles City vs. Grupo Financiero Banorte | Hoteles City vs. Grupo Bimbo SAB | Hoteles City vs. Fomento Econmico Mexicano |
| ProShares Trust vs. Promotora y Operadora | ProShares Trust vs. UnitedHealth Group Incorporated | ProShares Trust vs. Qulitas Controladora SAB | ProShares Trust vs. Hoteles City Express |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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