Correlation Between Hotel Property and Vicinity Centres
Can any of the company-specific risk be diversified away by investing in both Hotel Property and Vicinity Centres 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 Vicinity Centres 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 Vicinity Centres Re, you can compare the effects of market volatilities on Hotel Property and Vicinity Centres 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 Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Vicinity Centres.
Diversification Opportunities for Hotel Property and Vicinity Centres
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hotel and Vicinity is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Vicinity Centres Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres 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 Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of Hotel Property i.e., Hotel Property and Vicinity Centres go up and down completely randomly.
Pair Corralation between Hotel Property and Vicinity Centres
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.54 times more return on investment than Vicinity Centres. However, Hotel Property Investments is 1.86 times less risky than Vicinity Centres. It trades about 0.37 of its potential returns per unit of risk. Vicinity Centres Re is currently generating about -0.03 per unit of risk. If you would invest 352.00 in Hotel Property Investments on August 31, 2024 and sell it today you would earn a total of 18.00 from holding Hotel Property Investments or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Vicinity Centres Re
Performance |
| Timeline |
| Hotel Property Inves |
| Vicinity Centres |
Hotel Property and Vicinity Centres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Vicinity Centres
The main advantage of trading using opposite Hotel Property and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Property position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.| Hotel Property vs. Queste Communications | Hotel Property vs. Super Retail Group | Hotel Property vs. Retail Food Group | Hotel Property vs. Spirit Telecom |
| Vicinity Centres vs. Viva Leisure | Vicinity Centres vs. Alto Metals | Vicinity Centres vs. Centuria Industrial Reit | Vicinity Centres vs. Hotel Property 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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