Correlation Between Hotel Property and Global Health
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Global Health 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 Global Health 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 Global Health, you can compare the effects of market volatilities on Hotel Property and Global Health 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Global Health.
Diversification Opportunities for Hotel Property and Global Health
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotel and Global is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Hotel Property i.e., Hotel Property and Global Health go up and down completely randomly.
Pair Corralation between Hotel Property and Global Health
Assuming the 90 days trading horizon Hotel Property is expected to generate 1.08 times less return on investment than Global Health. But when comparing it to its historical volatility, Hotel Property Investments is 3.47 times less risky than Global Health. It trades about 0.03 of its potential returns per unit of risk. Global Health is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Global Health on September 13, 2024 and sell it today you would lose (7.00) from holding Global Health or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Global Health
Performance |
| Timeline |
| Hotel Property Inves |
| Global Health |
Hotel Property and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Global Health
The main advantage of trading using opposite Hotel Property and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Global Health 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 Global Health will offset losses from the drop in Global Health'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 |
| Global Health vs. PVW Resources | Global Health vs. Woolworths | Global Health vs. Wesfarmers | Global Health vs. Ramsay Health Care |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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