Correlation Between Hotel Property and Marquee Resources
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Marquee 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 Marquee 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 Marquee Resources, you can compare the effects of market volatilities on Hotel Property and Marquee 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 Marquee Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Marquee Resources.
Diversification Opportunities for Hotel Property and Marquee Resources
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotel and Marquee is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Marquee Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marquee 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 Marquee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marquee Resources has no effect on the direction of Hotel Property i.e., Hotel Property and Marquee Resources go up and down completely randomly.
Pair Corralation between Hotel Property and Marquee Resources
Assuming the 90 days trading horizon Hotel Property is expected to generate 6.41 times less return on investment than Marquee Resources. But when comparing it to its historical volatility, Hotel Property Investments is 9.81 times less risky than Marquee Resources. It trades about 0.33 of its potential returns per unit of risk. Marquee Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1.30 in Marquee Resources on September 13, 2024 and sell it today you would earn a total of 0.40 from holding Marquee Resources or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hotel Property Investments vs. Marquee Resources
Performance |
| Timeline |
| Hotel Property Inves |
| Marquee Resources |
Hotel Property and Marquee Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Marquee Resources
The main advantage of trading using opposite Hotel Property and Marquee Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Marquee 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 Marquee Resources will offset losses from the drop in Marquee 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 |
| Marquee Resources vs. Northern Star Resources | Marquee Resources vs. Evolution Mining | Marquee Resources vs. Bluescope Steel | Marquee 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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