Correlation Between Institut IGH and Arena Hospitality
Can any of the company-specific risk be diversified away by investing in both Institut IGH and Arena Hospitality 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 Institut IGH and Arena Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Institut IGH dd and Arena Hospitality Group, you can compare the effects of market volatilities on Institut IGH and Arena Hospitality 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 Institut IGH with a short position of Arena Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Institut IGH and Arena Hospitality.
Diversification Opportunities for Institut IGH and Arena Hospitality
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Institut and Arena is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Institut IGH dd and Arena Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Hospitality and Institut IGH 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 Institut IGH dd are associated (or correlated) with Arena Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Hospitality has no effect on the direction of Institut IGH i.e., Institut IGH and Arena Hospitality go up and down completely randomly.
Pair Corralation between Institut IGH and Arena Hospitality
Assuming the 90 days trading horizon Institut IGH dd is expected to under-perform the Arena Hospitality. In addition to that, Institut IGH is 5.23 times more volatile than Arena Hospitality Group. It trades about -0.28 of its total potential returns per unit of risk. Arena Hospitality Group is currently generating about -0.03 per unit of volatility. If you would invest 3,200 in Arena Hospitality Group on September 13, 2024 and sell it today you would lose (20.00) from holding Arena Hospitality Group or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.16% |
| Values | Daily Returns |
Institut IGH dd vs. Arena Hospitality Group
Performance |
| Timeline |
| Institut IGH dd |
| Arena Hospitality |
Institut IGH and Arena Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Institut IGH and Arena Hospitality
The main advantage of trading using opposite Institut IGH and Arena Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Institut IGH position performs unexpectedly, Arena Hospitality 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 Arena Hospitality will offset losses from the drop in Arena Hospitality's long position.| Institut IGH vs. AD Plastik dd | Institut IGH vs. Hrvatska Postanska Banka | Institut IGH vs. Dalekovod dd | Institut IGH vs. Podravka Prehrambena Industrija |
| Arena Hospitality vs. AD Plastik dd | Arena Hospitality vs. Hrvatska Postanska Banka | Arena Hospitality vs. Dalekovod dd | Arena Hospitality vs. Podravka Prehrambena Industrija |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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