Correlation Between Grupo Hotelero and Consorcio ARA
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and Consorcio ARA 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 Grupo Hotelero and Consorcio ARA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Hotelero Santa and Consorcio ARA S, you can compare the effects of market volatilities on Grupo Hotelero and Consorcio ARA 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 Grupo Hotelero with a short position of Consorcio ARA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and Consorcio ARA.
Diversification Opportunities for Grupo Hotelero and Consorcio ARA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Consorcio is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and Consorcio ARA S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consorcio ARA S and Grupo Hotelero 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 Grupo Hotelero Santa are associated (or correlated) with Consorcio ARA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consorcio ARA S has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and Consorcio ARA go up and down completely randomly.
Pair Corralation between Grupo Hotelero and Consorcio ARA
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to generate 1.08 times more return on investment than Consorcio ARA. However, Grupo Hotelero is 1.08 times more volatile than Consorcio ARA S. It trades about -0.01 of its potential returns per unit of risk. Consorcio ARA S is currently generating about -0.02 per unit of risk. If you would invest 432.00 in Grupo Hotelero Santa on September 12, 2024 and sell it today you would lose (52.00) from holding Grupo Hotelero Santa or give up 12.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. Consorcio ARA S
Performance |
| Timeline |
| Grupo Hotelero Santa |
| Consorcio ARA S |
Grupo Hotelero and Consorcio ARA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and Consorcio ARA
The main advantage of trading using opposite Grupo Hotelero and Consorcio ARA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, Consorcio ARA 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 Consorcio ARA will offset losses from the drop in Consorcio ARA's long position.| Grupo Hotelero vs. Grupo Profuturo SAB | Grupo Hotelero vs. Promotora y Operadora | Grupo Hotelero vs. Promotora y Operadora | Grupo Hotelero vs. The Select Sector |
| Consorcio ARA vs. Grupo Profuturo SAB | Consorcio ARA vs. Promotora y Operadora | Consorcio ARA vs. Promotora y Operadora | Consorcio ARA vs. The Select Sector |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |