Correlation Between Hotel Property and Carawine Resources
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Carawine 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 Carawine 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 Carawine Resources Limited, you can compare the effects of market volatilities on Hotel Property and Carawine 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 Carawine Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Carawine Resources.
Diversification Opportunities for Hotel Property and Carawine Resources
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hotel and Carawine is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Carawine Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carawine 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 Carawine Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carawine Resources has no effect on the direction of Hotel Property i.e., Hotel Property and Carawine Resources go up and down completely randomly.
Pair Corralation between Hotel Property and Carawine Resources
Assuming the 90 days trading horizon Hotel Property is expected to generate 2.34 times less return on investment than Carawine Resources. But when comparing it to its historical volatility, Hotel Property Investments is 2.66 times less risky than Carawine Resources. It trades about 0.03 of its potential returns per unit of risk. Carawine Resources Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Carawine Resources Limited on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Carawine Resources Limited or generate 9.09% 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. Carawine Resources Limited
Performance |
| Timeline |
| Hotel Property Inves |
| Carawine Resources |
Hotel Property and Carawine Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Carawine Resources
The main advantage of trading using opposite Hotel Property and Carawine Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Carawine 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 Carawine Resources will offset losses from the drop in Carawine 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 |
| Carawine Resources vs. Northern Star Resources | Carawine Resources vs. Evolution Mining | Carawine Resources vs. Bluescope Steel | Carawine Resources vs. Sandfire Resources NL |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |