Correlation Between Hotel Majestic and Mediantechn
Can any of the company-specific risk be diversified away by investing in both Hotel Majestic and Mediantechn 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 Hotel Majestic and Mediantechn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Majestic Cannes and Mediantechn, you can compare the effects of market volatilities on Hotel Majestic and Mediantechn 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 Hotel Majestic with a short position of Mediantechn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Majestic and Mediantechn.
Diversification Opportunities for Hotel Majestic and Mediantechn
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hotel and Mediantechn is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Majestic Cannes and Mediantechn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediantechn and Hotel Majestic 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 Hotel Majestic Cannes are associated (or correlated) with Mediantechn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediantechn has no effect on the direction of Hotel Majestic i.e., Hotel Majestic and Mediantechn go up and down completely randomly.
Pair Corralation between Hotel Majestic and Mediantechn
Assuming the 90 days trading horizon Hotel Majestic Cannes is expected to generate 0.36 times more return on investment than Mediantechn. However, Hotel Majestic Cannes is 2.8 times less risky than Mediantechn. It trades about 0.03 of its potential returns per unit of risk. Mediantechn is currently generating about 0.01 per unit of risk. If you would invest 460,000 in Hotel Majestic Cannes on September 14, 2024 and sell it today you would earn a total of 60,000 from holding Hotel Majestic Cannes or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Majestic Cannes vs. Mediantechn
Performance |
| Timeline |
| Hotel Majestic Cannes |
| Mediantechn |
Hotel Majestic and Mediantechn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Majestic and Mediantechn
The main advantage of trading using opposite Hotel Majestic and Mediantechn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Majestic position performs unexpectedly, Mediantechn 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 Mediantechn will offset losses from the drop in Mediantechn's long position.| Hotel Majestic vs. Les Hotels Bav | Hotel Majestic vs. Groupe Partouche SA | Hotel Majestic vs. Centrale dAchat Franaise | Hotel Majestic vs. Manitou BF SA |
| Mediantechn vs. Gensight Biologics SA | Mediantechn vs. Innate Pharma | Mediantechn vs. Poxel SA | Mediantechn vs. Nanobiotix SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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