Correlation Between Hotel Property and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Sandon Capital 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 Sandon Capital 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 Sandon Capital Investments, you can compare the effects of market volatilities on Hotel Property and Sandon Capital 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 Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Sandon Capital.
Diversification Opportunities for Hotel Property and Sandon Capital
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hotel and Sandon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves 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 Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Hotel Property i.e., Hotel Property and Sandon Capital go up and down completely randomly.
Pair Corralation between Hotel Property and Sandon Capital
Assuming the 90 days trading horizon Hotel Property is expected to generate 1305.0 times less return on investment than Sandon Capital. But when comparing it to its historical volatility, Hotel Property Investments is 6.33 times less risky than Sandon Capital. It trades about 0.0 of its potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Sandon Capital Investments on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Sandon Capital Investments or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hotel Property Investments vs. Sandon Capital Investments
Performance |
| Timeline |
| Hotel Property Inves |
| Sandon Capital Inves |
Hotel Property and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Sandon Capital
The main advantage of trading using opposite Hotel Property and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Hotel Property vs. Flagship Investments | Hotel Property vs. Hudson Investment Group | Hotel Property vs. National Storage REIT | Hotel Property vs. Retail Food Group |
| Sandon Capital vs. Aneka Tambang Tbk | Sandon Capital vs. BHP Group Limited | Sandon Capital vs. Ecofibre | Sandon Capital vs. iShares Global Healthcare |
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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