Correlation Between Les Htels and Les Hotels
Can any of the company-specific risk be diversified away by investing in both Les Htels and Les Hotels 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 Les Htels and Les Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Les Htels de and Les Hotels Bav, you can compare the effects of market volatilities on Les Htels and Les Hotels 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 Les Htels with a short position of Les Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Htels and Les Hotels.
Diversification Opportunities for Les Htels and Les Hotels
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Les and Les is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Les Htels de and Les Hotels Bav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Hotels Bav and Les Htels 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 Les Htels de are associated (or correlated) with Les Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Hotels Bav has no effect on the direction of Les Htels i.e., Les Htels and Les Hotels go up and down completely randomly.
Pair Corralation between Les Htels and Les Hotels
Assuming the 90 days trading horizon Les Htels de is expected to generate 2.87 times more return on investment than Les Hotels. However, Les Htels is 2.87 times more volatile than Les Hotels Bav. It trades about 0.03 of its potential returns per unit of risk. Les Hotels Bav is currently generating about 0.02 per unit of risk. If you would invest 134.00 in Les Htels de on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Les Htels de or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.98% |
| Values | Daily Returns |
Les Htels de vs. Les Hotels Bav
Performance |
| Timeline |
| Les Htels de |
| Les Hotels Bav |
Les Htels and Les Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Htels and Les Hotels
The main advantage of trading using opposite Les Htels and Les Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Htels position performs unexpectedly, Les Hotels 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 Les Hotels will offset losses from the drop in Les Hotels' long position.| Les Htels vs. Accor S A | Les Htels vs. Ferm Casino Mun | Les Htels vs. Les Hotels Bav | Les Htels vs. Hotelim Socit Anonyme |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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