Correlation Between Hotel Property and Aruma Resources
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Aruma Resources 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 Hotel Property and Aruma Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Property Investments and Aruma Resources, you can compare the effects of market volatilities on Hotel Property and Aruma Resources 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 Hotel Property with a short position of Aruma Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Aruma Resources.
Diversification Opportunities for Hotel Property and Aruma Resources
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotel and Aruma is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Aruma Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aruma Resources and Hotel Property 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 Hotel Property Investments are associated (or correlated) with Aruma Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aruma Resources has no effect on the direction of Hotel Property i.e., Hotel Property and Aruma Resources go up and down completely randomly.
Pair Corralation between Hotel Property and Aruma Resources
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.1 times more return on investment than Aruma Resources. However, Hotel Property Investments is 9.87 times less risky than Aruma Resources. It trades about 0.33 of its potential returns per unit of risk. Aruma Resources is currently generating about -0.07 per unit of risk. If you would invest 361.00 in Hotel Property Investments on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Hotel Property Investments or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Aruma Resources
Performance |
| Timeline |
| Hotel Property Inves |
| Aruma Resources |
Hotel Property and Aruma Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Aruma Resources
The main advantage of trading using opposite Hotel Property and Aruma Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Aruma Resources 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 Aruma Resources will offset losses from the drop in Aruma Resources' long position.| Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Cromwell Property Group |
| Aruma Resources vs. MA Financial Group | Aruma Resources vs. Qbe Insurance Group | Aruma Resources vs. Oceania Healthcare | Aruma Resources vs. Medibank Private |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |