Correlation Between Grupo Hotelero and Vista Oil
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and Vista Oil 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 Vista Oil 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 Vista Oil Gas, you can compare the effects of market volatilities on Grupo Hotelero and Vista Oil 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 Vista Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and Vista Oil.
Diversification Opportunities for Grupo Hotelero and Vista Oil
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grupo and Vista is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and Vista Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Oil Gas 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 Vista Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Oil Gas has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and Vista Oil go up and down completely randomly.
Pair Corralation between Grupo Hotelero and Vista Oil
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to under-perform the Vista Oil. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Hotelero Santa is 1.65 times less risky than Vista Oil. The stock trades about -0.01 of its potential returns per unit of risk. The Vista Oil Gas is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 92,500 in Vista Oil Gas on October 14, 2024 and sell it today you would earn a total of 27,500 from holding Vista Oil Gas or generate 29.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. Vista Oil Gas
Performance |
| Timeline |
| Grupo Hotelero Santa |
| Vista Oil Gas |
Grupo Hotelero and Vista Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and Vista Oil
The main advantage of trading using opposite Grupo Hotelero and Vista Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, Vista Oil 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 Vista Oil will offset losses from the drop in Vista Oil's long position.| Grupo Hotelero vs. Delta Air Lines | Grupo Hotelero vs. Capital One Financial | Grupo Hotelero vs. Prudential Financial | Grupo Hotelero vs. Hoteles City Express |
| Vista Oil vs. Grupo Hotelero Santa | Vista Oil vs. Micron Technology | Vista Oil vs. McEwen Mining | Vista Oil vs. Grupo Sports World |
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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