Correlation Between Hotel Property and Mcmillan Shakespeare
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Mcmillan Shakespeare 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 Mcmillan Shakespeare 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 Mcmillan Shakespeare, you can compare the effects of market volatilities on Hotel Property and Mcmillan Shakespeare 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 Mcmillan Shakespeare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Mcmillan Shakespeare.
Diversification Opportunities for Hotel Property and Mcmillan Shakespeare
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotel and Mcmillan is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Mcmillan Shakespeare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mcmillan Shakespeare 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 Mcmillan Shakespeare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mcmillan Shakespeare has no effect on the direction of Hotel Property i.e., Hotel Property and Mcmillan Shakespeare go up and down completely randomly.
Pair Corralation between Hotel Property and Mcmillan Shakespeare
Assuming the 90 days trading horizon Hotel Property is expected to generate 7385.0 times less return on investment than Mcmillan Shakespeare. But when comparing it to its historical volatility, Hotel Property Investments is 21.52 times less risky than Mcmillan Shakespeare. It trades about 0.0 of its potential returns per unit of risk. Mcmillan Shakespeare is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,343 in Mcmillan Shakespeare on December 11, 2024 and sell it today you would earn a total of 213.00 from holding Mcmillan Shakespeare or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Hotel Property Investments vs. Mcmillan Shakespeare
Performance |
| Timeline |
| Hotel Property Inves |
| Mcmillan Shakespeare |
Hotel Property and Mcmillan Shakespeare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Mcmillan Shakespeare
The main advantage of trading using opposite Hotel Property and Mcmillan Shakespeare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Mcmillan Shakespeare 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 Mcmillan Shakespeare will offset losses from the drop in Mcmillan Shakespeare's long position.| Hotel Property vs. Aristocrat Leisure | Hotel Property vs. Autosports Group | Hotel Property vs. Oneview Healthcare PLC | Hotel Property vs. Oceania Healthcare |
| Mcmillan Shakespeare vs. Ecofibre | Mcmillan Shakespeare vs. iShares Global Healthcare | Mcmillan Shakespeare vs. Australian Dairy Farms | Mcmillan Shakespeare vs. Adriatic Metals Plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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