Correlation Between Grupo Hotelero and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC, you can compare the effects of market volatilities on Grupo Hotelero and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and AstraZeneca PLC.
Diversification Opportunities for Grupo Hotelero and AstraZeneca PLC
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and AstraZeneca is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Grupo Hotelero and AstraZeneca PLC
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to generate 0.29 times more return on investment than AstraZeneca PLC. However, Grupo Hotelero Santa is 3.43 times less risky than AstraZeneca PLC. It trades about 0.18 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.03 per unit of risk. If you would invest 388.00 in Grupo Hotelero Santa on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Grupo Hotelero Santa or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. AstraZeneca PLC
Performance |
| Timeline |
| Grupo Hotelero Santa |
| AstraZeneca PLC |
Grupo Hotelero and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and AstraZeneca PLC
The main advantage of trading using opposite Grupo Hotelero and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Grupo Hotelero vs. United Airlines Holdings | Grupo Hotelero vs. Cognizant Technology Solutions | Grupo Hotelero vs. Micron Technology | Grupo Hotelero vs. Prudential Financial |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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