Correlation Between Japan Asia and HYATT HOTELS-A
Can any of the company-specific risk be diversified away by investing in both Japan Asia and HYATT HOTELS-A 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 Japan Asia and HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and HYATT HOTELS A, you can compare the effects of market volatilities on Japan Asia and HYATT HOTELS-A 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 Japan Asia with a short position of HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and HYATT HOTELS-A.
Diversification Opportunities for Japan Asia and HYATT HOTELS-A
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Japan and HYATT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and Japan Asia 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 Japan Asia Investment are associated (or correlated) with HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Japan Asia i.e., Japan Asia and HYATT HOTELS-A go up and down completely randomly.
Pair Corralation between Japan Asia and HYATT HOTELS-A
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the HYATT HOTELS-A. In addition to that, Japan Asia is 1.4 times more volatile than HYATT HOTELS A. It trades about -0.15 of its total potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.01 per unit of volatility. If you would invest 15,180 in HYATT HOTELS A on November 4, 2024 and sell it today you would earn a total of 25.00 from holding HYATT HOTELS A or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. HYATT HOTELS A
Performance |
| Timeline |
| Japan Asia Investment |
| HYATT HOTELS A |
Japan Asia and HYATT HOTELS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and HYATT HOTELS-A
The main advantage of trading using opposite Japan Asia and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.| Japan Asia vs. BII Railway Transportation | Japan Asia vs. Yuexiu Transport Infrastructure | Japan Asia vs. Air Transport Services | Japan Asia vs. BRAEMAR HOTELS RES |
| HYATT HOTELS-A vs. DAIDO METAL TD | HYATT HOTELS-A vs. Amkor Technology | HYATT HOTELS-A vs. Nippon Light Metal | HYATT HOTELS-A vs. NURAN WIRELESS INC |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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