Correlation Between National Atomic and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both National Atomic and PPHE Hotel 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 National Atomic and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Atomic Co and PPHE Hotel Group, you can compare the effects of market volatilities on National Atomic and PPHE Hotel 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 National Atomic with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Atomic and PPHE Hotel.
Diversification Opportunities for National Atomic and PPHE Hotel
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and PPHE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding National Atomic Co and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group and National Atomic 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 National Atomic Co are associated (or correlated) with PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of National Atomic i.e., National Atomic and PPHE Hotel go up and down completely randomly.
Pair Corralation between National Atomic and PPHE Hotel
Assuming the 90 days trading horizon National Atomic Co is expected to generate 1.55 times more return on investment than PPHE Hotel. However, National Atomic is 1.55 times more volatile than PPHE Hotel Group. It trades about 0.07 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.03 per unit of risk. If you would invest 2,435 in National Atomic Co on August 31, 2024 and sell it today you would earn a total of 1,610 from holding National Atomic Co or generate 66.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Atomic Co vs. PPHE Hotel Group
Performance |
| Timeline |
| National Atomic |
| PPHE Hotel Group |
National Atomic and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Atomic and PPHE Hotel
The main advantage of trading using opposite National Atomic and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Atomic position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| National Atomic vs. Zoom Video Communications | National Atomic vs. Enbridge | National Atomic vs. Coor Service Management | National Atomic vs. Surgical Science Sweden |
| PPHE Hotel vs. Berkshire Hathaway | PPHE Hotel vs. Hyundai Motor | PPHE Hotel vs. Samsung Electronics Co | PPHE Hotel vs. Samsung Electronics Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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