Correlation Between Hotel Property and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Nufarm Finance 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 Nufarm Finance 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 Nufarm Finance NZ, you can compare the effects of market volatilities on Hotel Property and Nufarm Finance 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 Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Nufarm Finance.
Diversification Opportunities for Hotel Property and Nufarm Finance
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hotel and Nufarm is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ 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 Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of Hotel Property i.e., Hotel Property and Nufarm Finance go up and down completely randomly.
Pair Corralation between Hotel Property and Nufarm Finance
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 1.99 times more return on investment than Nufarm Finance. However, Hotel Property is 1.99 times more volatile than Nufarm Finance NZ. It trades about 0.03 of its potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.05 per unit of risk. If you would invest 326.00 in Hotel Property Investments on November 7, 2024 and sell it today you would earn a total of 50.00 from holding Hotel Property Investments or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Nufarm Finance NZ
Performance |
| Timeline |
| Hotel Property Inves |
| Nufarm Finance NZ |
Hotel Property and Nufarm Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Nufarm Finance
The main advantage of trading using opposite Hotel Property and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance's long position.| Hotel Property vs. Charter Hall Education | Hotel Property vs. Embark Education Group | Hotel Property vs. National Storage REIT | Hotel Property vs. Iron Road |
| Nufarm Finance vs. Carlton Investments | Nufarm Finance vs. Mirrabooka Investments | Nufarm Finance vs. Argo Investments | Nufarm Finance vs. Auctus Alternative 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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