Correlation Between Hotel Property and Bank of Queensland
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland, you can compare the effects of market volatilities on Hotel Property and Bank of Queensland 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 Bank of Queensland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Bank of Queensland.
Diversification Opportunities for Hotel Property and Bank of Queensland
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hotel and Bank is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Bank of Queensland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Queensland 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 Bank of Queensland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Queensland has no effect on the direction of Hotel Property i.e., Hotel Property and Bank of Queensland go up and down completely randomly.
Pair Corralation between Hotel Property and Bank of Queensland
Assuming the 90 days trading horizon Hotel Property is expected to generate 229.0 times less return on investment than Bank of Queensland. But when comparing it to its historical volatility, Hotel Property Investments is 1.69 times less risky than Bank of Queensland. It trades about 0.0 of its potential returns per unit of risk. Bank of Queensland is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 10,380 in Bank of Queensland on October 23, 2024 and sell it today you would earn a total of 85.00 from holding Bank of Queensland or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Bank of Queensland
Performance |
| Timeline |
| Hotel Property Inves |
| Bank of Queensland |
Hotel Property and Bank of Queensland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Bank of Queensland
The main advantage of trading using opposite Hotel Property and Bank of Queensland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Bank of Queensland 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 Bank of Queensland will offset losses from the drop in Bank of Queensland's 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 |
| Bank of Queensland vs. Mystate | Bank of Queensland vs. Skycity Entertainment Group | Bank of Queensland vs. Insurance Australia Group | Bank of Queensland vs. Kip McGrath Education |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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