Correlation Between Hotel Property and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Clime Investment 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 Clime Investment 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 Clime Investment Management, you can compare the effects of market volatilities on Hotel Property and Clime Investment 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 Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Clime Investment.
Diversification Opportunities for Hotel Property and Clime Investment
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hotel and Clime is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man 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 Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Hotel Property i.e., Hotel Property and Clime Investment go up and down completely randomly.
Pair Corralation between Hotel Property and Clime Investment
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.53 times more return on investment than Clime Investment. However, Hotel Property Investments is 1.9 times less risky than Clime Investment. It trades about 0.1 of its potential returns per unit of risk. Clime Investment Management is currently generating about 0.05 per unit of risk. If you would invest 276.00 in Hotel Property Investments on November 2, 2024 and sell it today you would earn a total of 99.00 from holding Hotel Property Investments or generate 35.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Clime Investment Management
Performance |
| Timeline |
| Hotel Property Inves |
| Clime Investment Man |
Hotel Property and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Clime Investment
The main advantage of trading using opposite Hotel Property and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Hotel Property vs. Flagship Investments | Hotel Property vs. Hudson Investment Group | Hotel Property vs. National Storage REIT | Hotel Property vs. Retail Food Group |
| Clime Investment vs. Sky Metals | Clime Investment vs. MFF Capital Investments | Clime Investment vs. Steamships Trading | Clime Investment vs. Carlton Investments |
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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