Correlation Between Grupo Hotelero and Polaris
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and Polaris 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 Polaris 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 Polaris, you can compare the effects of market volatilities on Grupo Hotelero and Polaris 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 Polaris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and Polaris.
Diversification Opportunities for Grupo Hotelero and Polaris
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Polaris is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris 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 Polaris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and Polaris go up and down completely randomly.
Pair Corralation between Grupo Hotelero and Polaris
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to generate 1.49 times more return on investment than Polaris. However, Grupo Hotelero is 1.49 times more volatile than Polaris. It trades about -0.01 of its potential returns per unit of risk. Polaris is currently generating about -0.07 per unit of risk. If you would invest 415.00 in Grupo Hotelero Santa on September 12, 2024 and sell it today you would lose (35.00) from holding Grupo Hotelero Santa or give up 8.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. Polaris
Performance |
| Timeline |
| Grupo Hotelero Santa |
| Polaris |
Grupo Hotelero and Polaris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and Polaris
The main advantage of trading using opposite Grupo Hotelero and Polaris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, Polaris 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 Polaris will offset losses from the drop in Polaris' 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 |
| Polaris vs. Costco Wholesale | Polaris vs. Capital One Financial | Polaris vs. Grupo Hotelero Santa | Polaris vs. GMxico Transportes SAB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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