Correlation Between Helios Fairfax and American Hotel
Can any of the company-specific risk be diversified away by investing in both Helios Fairfax and American Hotel 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 Helios Fairfax and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helios Fairfax Partners and American Hotel Income, you can compare the effects of market volatilities on Helios Fairfax and American Hotel 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 Helios Fairfax with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helios Fairfax and American Hotel.
Diversification Opportunities for Helios Fairfax and American Hotel
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Helios and American is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Helios Fairfax 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 Helios Fairfax Partners are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and American Hotel go up and down completely randomly.
Pair Corralation between Helios Fairfax and American Hotel
Assuming the 90 days trading horizon Helios Fairfax Partners is expected to under-perform the American Hotel. In addition to that, Helios Fairfax is 1.29 times more volatile than American Hotel Income. It trades about -0.1 of its total potential returns per unit of risk. American Hotel Income is currently generating about 0.35 per unit of volatility. If you would invest 49.00 in American Hotel Income on October 9, 2024 and sell it today you would earn a total of 19.00 from holding American Hotel Income or generate 38.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helios Fairfax Partners vs. American Hotel Income
Performance |
| Timeline |
| Helios Fairfax Partners |
| American Hotel Income |
Helios Fairfax and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helios Fairfax and American Hotel
The main advantage of trading using opposite Helios Fairfax and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helios Fairfax position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Helios Fairfax vs. Aya Gold Silver | Helios Fairfax vs. Goodfood Market Corp | Helios Fairfax vs. Maple Leaf Foods | Helios Fairfax vs. Plaza Retail REIT |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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