Correlation Between LBG Media and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both LBG Media and Dalata 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 LBG Media and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LBG Media PLC and Dalata Hotel Group, you can compare the effects of market volatilities on LBG Media and Dalata 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 LBG Media with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and Dalata Hotel.
Diversification Opportunities for LBG Media and Dalata Hotel
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LBG and Dalata is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and LBG Media 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 LBG Media PLC are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of LBG Media i.e., LBG Media and Dalata Hotel go up and down completely randomly.
Pair Corralation between LBG Media and Dalata Hotel
Assuming the 90 days trading horizon LBG Media PLC is expected to under-perform the Dalata Hotel. But the stock apears to be less risky and, when comparing its historical volatility, LBG Media PLC is 1.09 times less risky than Dalata Hotel. The stock trades about -0.11 of its potential returns per unit of risk. The Dalata Hotel Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 35,100 in Dalata Hotel Group on September 3, 2024 and sell it today you would earn a total of 2,400 from holding Dalata Hotel Group or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. Dalata Hotel Group
Performance |
| Timeline |
| LBG Media PLC |
| Dalata Hotel Group |
LBG Media and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and Dalata Hotel
The main advantage of trading using opposite LBG Media and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, Dalata 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| LBG Media vs. Intuitive Investments Group | LBG Media vs. European Metals Holdings | LBG Media vs. Athelney Trust plc | LBG Media vs. Invesco Health Care |
| Dalata Hotel vs. Rockfire Resources plc | Dalata Hotel vs. Tlou Energy | Dalata Hotel vs. Falcon Oil Gas | Dalata Hotel vs. Helium One Global |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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