Correlation Between Transport International and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Transport International and NH 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 Transport International and NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and NH HOTEL GROUP, you can compare the effects of market volatilities on Transport International and NH 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 Transport International with a short position of NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and NH HOTEL.
Diversification Opportunities for Transport International and NH HOTEL
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transport and NH5 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP and Transport International 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 Transport International Holdings are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Transport International i.e., Transport International and NH HOTEL go up and down completely randomly.
Pair Corralation between Transport International and NH HOTEL
Assuming the 90 days horizon Transport International is expected to generate 236.67 times less return on investment than NH HOTEL. But when comparing it to its historical volatility, Transport International Holdings is 5.57 times less risky than NH HOTEL. It trades about 0.01 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 414.00 in NH HOTEL GROUP on October 16, 2024 and sell it today you would earn a total of 212.00 from holding NH HOTEL GROUP or generate 51.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. NH HOTEL GROUP
Performance |
| Timeline |
| Transport International |
| NH HOTEL GROUP |
Transport International and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and NH HOTEL
The main advantage of trading using opposite Transport International and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, NH 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Transport International vs. Zurich Insurance Group | Transport International vs. SBI Insurance Group | Transport International vs. Direct Line Insurance | Transport International vs. GREENX METALS LTD |
| NH HOTEL vs. Fuji Media Holdings | NH HOTEL vs. Flutter Entertainment PLC | NH HOTEL vs. Transport International Holdings | NH HOTEL vs. Air Transport Services |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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