Correlation Between HOTELEST and PLASTIC INDUSTRY
Can any of the company-specific risk be diversified away by investing in both HOTELEST and PLASTIC INDUSTRY 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 HOTELEST and PLASTIC INDUSTRY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOTELEST LTD and PLASTIC INDUSTRY LTD, you can compare the effects of market volatilities on HOTELEST and PLASTIC INDUSTRY 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 HOTELEST with a short position of PLASTIC INDUSTRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOTELEST and PLASTIC INDUSTRY.
Diversification Opportunities for HOTELEST and PLASTIC INDUSTRY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HOTELEST and PLASTIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HOTELEST LTD and PLASTIC INDUSTRY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLASTIC INDUSTRY LTD and HOTELEST 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 HOTELEST LTD are associated (or correlated) with PLASTIC INDUSTRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLASTIC INDUSTRY LTD has no effect on the direction of HOTELEST i.e., HOTELEST and PLASTIC INDUSTRY go up and down completely randomly.
Pair Corralation between HOTELEST and PLASTIC INDUSTRY
Assuming the 90 days trading horizon HOTELEST LTD is expected to under-perform the PLASTIC INDUSTRY. But the stock apears to be less risky and, when comparing its historical volatility, HOTELEST LTD is 6.87 times less risky than PLASTIC INDUSTRY. The stock trades about -0.05 of its potential returns per unit of risk. The PLASTIC INDUSTRY LTD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,645 in PLASTIC INDUSTRY LTD on August 31, 2024 and sell it today you would lose (295.00) from holding PLASTIC INDUSTRY LTD or give up 6.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.71% |
| Values | Daily Returns |
HOTELEST LTD vs. PLASTIC INDUSTRY LTD
Performance |
| Timeline |
| HOTELEST LTD |
| PLASTIC INDUSTRY LTD |
HOTELEST and PLASTIC INDUSTRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOTELEST and PLASTIC INDUSTRY
The main advantage of trading using opposite HOTELEST and PLASTIC INDUSTRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOTELEST position performs unexpectedly, PLASTIC INDUSTRY 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 PLASTIC INDUSTRY will offset losses from the drop in PLASTIC INDUSTRY's long position.| HOTELEST vs. FINCORP INVESTMENT LTD | HOTELEST vs. MCB GROUP LTD | HOTELEST vs. CAUDAN DEVELOPMENT LTD | HOTELEST vs. LOTTOTECH LTD |
| PLASTIC INDUSTRY vs. FINCORP INVESTMENT LTD | PLASTIC INDUSTRY vs. MCB GROUP LTD | PLASTIC INDUSTRY vs. CAUDAN DEVELOPMENT LTD | PLASTIC INDUSTRY vs. LOTTOTECH LTD |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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