Correlation Between American Hotel and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both American Hotel and Gatos Silver 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 American Hotel and Gatos Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Gatos Silver, you can compare the effects of market volatilities on American Hotel and Gatos Silver 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 American Hotel with a short position of Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Gatos Silver.
Diversification Opportunities for American Hotel and Gatos Silver
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Gatos is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver and American Hotel 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 American Hotel Income are associated (or correlated) with Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of American Hotel i.e., American Hotel and Gatos Silver go up and down completely randomly.
Pair Corralation between American Hotel and Gatos Silver
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Gatos Silver. In addition to that, American Hotel is 1.31 times more volatile than Gatos Silver. It trades about -0.04 of its total potential returns per unit of risk. Gatos Silver is currently generating about 0.09 per unit of volatility. If you would invest 573.00 in Gatos Silver on September 4, 2024 and sell it today you would earn a total of 1,530 from holding Gatos Silver or generate 267.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.73% |
| Values | Daily Returns |
American Hotel Income vs. Gatos Silver
Performance |
| Timeline |
| American Hotel Income |
| Gatos Silver |
American Hotel and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Gatos Silver
The main advantage of trading using opposite American Hotel and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Gatos Silver 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.| American Hotel vs. Brookfield Office Properties | American Hotel vs. Summa Silver Corp | American Hotel vs. Leons Furniture Limited | American Hotel vs. TGS Esports |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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