Correlation Between Fonciere Inea and Covivio Hotels
Can any of the company-specific risk be diversified away by investing in both Fonciere Inea and Covivio Hotels 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 Fonciere Inea and Covivio Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fonciere Inea and Covivio Hotels, you can compare the effects of market volatilities on Fonciere Inea and Covivio Hotels 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 Fonciere Inea with a short position of Covivio Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonciere Inea and Covivio Hotels.
Diversification Opportunities for Fonciere Inea and Covivio Hotels
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fonciere and Covivio is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fonciere Inea and Covivio Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio Hotels and Fonciere Inea 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 Fonciere Inea are associated (or correlated) with Covivio Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio Hotels has no effect on the direction of Fonciere Inea i.e., Fonciere Inea and Covivio Hotels go up and down completely randomly.
Pair Corralation between Fonciere Inea and Covivio Hotels
Assuming the 90 days trading horizon Fonciere Inea is expected to under-perform the Covivio Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Fonciere Inea is 1.02 times less risky than Covivio Hotels. The stock trades about -0.01 of its potential returns per unit of risk. The Covivio Hotels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,283 in Covivio Hotels on August 30, 2024 and sell it today you would earn a total of 572.00 from holding Covivio Hotels or generate 44.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fonciere Inea vs. Covivio Hotels
Performance |
| Timeline |
| Fonciere Inea |
| Covivio Hotels |
Fonciere Inea and Covivio Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fonciere Inea and Covivio Hotels
The main advantage of trading using opposite Fonciere Inea and Covivio Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonciere Inea position performs unexpectedly, Covivio Hotels 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 Covivio Hotels will offset losses from the drop in Covivio Hotels' long position.| Fonciere Inea vs. Covivio SA | Fonciere Inea vs. Altarea SCA | Fonciere Inea vs. Icade SA | Fonciere Inea vs. Gecina SA |
| Covivio Hotels vs. Covivio SA | Covivio Hotels vs. Altarea SCA | Covivio Hotels vs. Icade SA | Covivio Hotels vs. Gecina SA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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