Correlation Between American Hotel and T2 Metals
Can any of the company-specific risk be diversified away by investing in both American Hotel and T2 Metals 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 T2 Metals 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 T2 Metals Corp, you can compare the effects of market volatilities on American Hotel and T2 Metals 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and T2 Metals.
Diversification Opportunities for American Hotel and T2 Metals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and TWO is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals Corp 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of American Hotel i.e., American Hotel and T2 Metals go up and down completely randomly.
Pair Corralation between American Hotel and T2 Metals
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the T2 Metals. In addition to that, American Hotel is 4.56 times more volatile than T2 Metals Corp. It trades about -0.13 of its total potential returns per unit of risk. T2 Metals Corp is currently generating about -0.11 per unit of volatility. If you would invest 22.00 in T2 Metals Corp on November 1, 2024 and sell it today you would lose (1.00) from holding T2 Metals Corp or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Hotel Income vs. T2 Metals Corp
Performance |
| Timeline |
| American Hotel Income |
| T2 Metals Corp |
American Hotel and T2 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and T2 Metals
The main advantage of trading using opposite American Hotel and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, T2 Metals 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 T2 Metals will offset losses from the drop in T2 Metals' long position.| American Hotel vs. T2 Metals Corp | American Hotel vs. Nicola Mining | American Hotel vs. Calibre Mining Corp | American Hotel vs. Metalero Mining Corp |
| T2 Metals vs. Information Services | T2 Metals vs. NextSource Materials | T2 Metals vs. Diamond Estates Wines | T2 Metals vs. Verizon Communications CDR |
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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