Correlation Between Kelly Strategic and Defiance Hotel
Can any of the company-specific risk be diversified away by investing in both Kelly Strategic and Defiance Hotel 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 Kelly Strategic and Defiance Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelly Strategic Management and Defiance Hotel Airline, you can compare the effects of market volatilities on Kelly Strategic and Defiance Hotel 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 Kelly Strategic with a short position of Defiance Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelly Strategic and Defiance Hotel.
Diversification Opportunities for Kelly Strategic and Defiance Hotel
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kelly and Defiance is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Strategic Management and Defiance Hotel Airline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Hotel Airline and Kelly Strategic 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 Kelly Strategic Management are associated (or correlated) with Defiance Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Hotel Airline has no effect on the direction of Kelly Strategic i.e., Kelly Strategic and Defiance Hotel go up and down completely randomly.
Pair Corralation between Kelly Strategic and Defiance Hotel
Given the investment horizon of 90 days Kelly Strategic Management is expected to generate 0.81 times more return on investment than Defiance Hotel. However, Kelly Strategic Management is 1.24 times less risky than Defiance Hotel. It trades about 0.14 of its potential returns per unit of risk. Defiance Hotel Airline is currently generating about 0.07 per unit of risk. If you would invest 1,462 in Kelly Strategic Management on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Kelly Strategic Management or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.04% |
| Values | Daily Returns |
Kelly Strategic Management vs. Defiance Hotel Airline
Performance |
| Timeline |
| Kelly Strategic Mana |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Defiance Hotel Airline |
Kelly Strategic and Defiance Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelly Strategic and Defiance Hotel
The main advantage of trading using opposite Kelly Strategic and Defiance Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelly Strategic position performs unexpectedly, Defiance Hotel 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 Defiance Hotel will offset losses from the drop in Defiance Hotel's long position.| Kelly Strategic vs. Smith Nephew SNATS | Kelly Strategic vs. Fresenius Medical Care | Kelly Strategic vs. Fomento Economico Mexicano | Kelly Strategic vs. The Cooper Companies, |
| Defiance Hotel vs. Smith Nephew SNATS | Defiance Hotel vs. Fresenius Medical Care | Defiance Hotel vs. Fomento Economico Mexicano | Defiance Hotel vs. The Cooper Companies, |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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