Correlation Between Hotel Majestic and Pharnext
Can any of the company-specific risk be diversified away by investing in both Hotel Majestic and Pharnext 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 Pharnext 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 Pharnext SA, you can compare the effects of market volatilities on Hotel Majestic and Pharnext 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 Pharnext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Majestic and Pharnext.
Diversification Opportunities for Hotel Majestic and Pharnext
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hotel and Pharnext is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Majestic Cannes and Pharnext SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharnext SA 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 Pharnext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharnext SA has no effect on the direction of Hotel Majestic i.e., Hotel Majestic and Pharnext go up and down completely randomly.
Pair Corralation between Hotel Majestic and Pharnext
Assuming the 90 days trading horizon Hotel Majestic Cannes is expected to generate 0.09 times more return on investment than Pharnext. However, Hotel Majestic Cannes is 11.11 times less risky than Pharnext. It trades about 0.04 of its potential returns per unit of risk. Pharnext SA is currently generating about -0.05 per unit of risk. If you would invest 376,000 in Hotel Majestic Cannes on September 14, 2024 and sell it today you would earn a total of 144,000 from holding Hotel Majestic Cannes or generate 38.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.84% |
| Values | Daily Returns |
Hotel Majestic Cannes vs. Pharnext SA
Performance |
| Timeline |
| Hotel Majestic Cannes |
| Pharnext SA |
Hotel Majestic and Pharnext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Majestic and Pharnext
The main advantage of trading using opposite Hotel Majestic and Pharnext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Majestic position performs unexpectedly, Pharnext 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 Pharnext will offset losses from the drop in Pharnext'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 |
| Pharnext vs. Technip Energies BV | Pharnext vs. Entech SE SAS | Pharnext vs. Eutelsat Communications SA | Pharnext vs. Hotel Majestic Cannes |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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