Correlation Between Insignia Financial and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and Hotel Property 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 Insignia Financial and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Hotel Property Investments, you can compare the effects of market volatilities on Insignia Financial and Hotel Property 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 Insignia Financial with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Hotel Property.
Diversification Opportunities for Insignia Financial and Hotel Property
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Insignia and Hotel is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and Insignia Financial 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 Insignia Financial are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Insignia Financial i.e., Insignia Financial and Hotel Property go up and down completely randomly.
Pair Corralation between Insignia Financial and Hotel Property
Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.51 times less return on investment than Hotel Property. In addition to that, Insignia Financial is 1.57 times more volatile than Hotel Property Investments. It trades about 0.01 of its total potential returns per unit of risk. Hotel Property Investments is currently generating about 0.03 per unit of volatility. If you would invest 308.00 in Hotel Property Investments on August 29, 2024 and sell it today you would earn a total of 62.00 from holding Hotel Property Investments or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Hotel Property Investments
Performance |
| Timeline |
| Insignia Financial |
| Hotel Property Inves |
Insignia Financial and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Hotel Property
The main advantage of trading using opposite Insignia Financial and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| Insignia Financial vs. The Environmental Group | Insignia Financial vs. Legacy Iron Ore | Insignia Financial vs. Phoslock Environmental Technologies | Insignia Financial vs. Westpac Banking |
| Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Cromwell Property Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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