Correlation Between Hotel Majestic and Novatech Industries
Can any of the company-specific risk be diversified away by investing in both Hotel Majestic and Novatech Industries 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 Novatech Industries 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 Novatech Industries SA, you can compare the effects of market volatilities on Hotel Majestic and Novatech Industries 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 Novatech Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Majestic and Novatech Industries.
Diversification Opportunities for Hotel Majestic and Novatech Industries
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hotel and Novatech is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Majestic Cannes and Novatech Industries SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novatech Industries 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 Novatech Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novatech Industries has no effect on the direction of Hotel Majestic i.e., Hotel Majestic and Novatech Industries go up and down completely randomly.
Pair Corralation between Hotel Majestic and Novatech Industries
If you would invest 1,050 in Novatech Industries SA on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Novatech Industries SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Majestic Cannes vs. Novatech Industries SA
Performance |
| Timeline |
| Hotel Majestic Cannes |
| Novatech Industries |
Hotel Majestic and Novatech Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Majestic and Novatech Industries
The main advantage of trading using opposite Hotel Majestic and Novatech Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Majestic position performs unexpectedly, Novatech Industries 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 Novatech Industries will offset losses from the drop in Novatech Industries' long position.| Hotel Majestic vs. Affluent Medical SAS | Hotel Majestic vs. Gaztransport Technigaz SAS | Hotel Majestic vs. Boiron SA | Hotel Majestic vs. Jacquet Metal Service |
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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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