Correlation Between Lupatech and Hotis Othon
Can any of the company-specific risk be diversified away by investing in both Lupatech and Hotis Othon 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 Lupatech and Hotis Othon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Hotis Othon SA, you can compare the effects of market volatilities on Lupatech and Hotis Othon 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 Lupatech with a short position of Hotis Othon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Hotis Othon.
Diversification Opportunities for Lupatech and Hotis Othon
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lupatech and Hotis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Hotis Othon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotis Othon SA and Lupatech 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 Lupatech SA are associated (or correlated) with Hotis Othon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotis Othon SA has no effect on the direction of Lupatech i.e., Lupatech and Hotis Othon go up and down completely randomly.
Pair Corralation between Lupatech and Hotis Othon
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Hotis Othon. But the stock apears to be less risky and, when comparing its historical volatility, Lupatech SA is 1.63 times less risky than Hotis Othon. The stock trades about -0.28 of its potential returns per unit of risk. The Hotis Othon SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 227.00 in Hotis Othon SA on August 24, 2024 and sell it today you would earn a total of 29.00 from holding Hotis Othon SA or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupatech SA vs. Hotis Othon SA
Performance |
| Timeline |
| Lupatech SA |
| Hotis Othon SA |
Lupatech and Hotis Othon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Hotis Othon
The main advantage of trading using opposite Lupatech and Hotis Othon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech position performs unexpectedly, Hotis Othon 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 Hotis Othon will offset losses from the drop in Hotis Othon's long position.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit SA |
| Hotis Othon vs. Lupatech SA | Hotis Othon vs. Rossi Residencial SA | Hotis Othon vs. Fras le SA | Hotis Othon vs. Clave Indices De |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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