Correlation Between Hotel Majestic and Pierre Et
Can any of the company-specific risk be diversified away by investing in both Hotel Majestic and Pierre Et 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 Pierre Et 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 Pierre et Vacances, you can compare the effects of market volatilities on Hotel Majestic and Pierre Et 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 Pierre Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Majestic and Pierre Et.
Diversification Opportunities for Hotel Majestic and Pierre Et
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hotel and Pierre is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Majestic Cannes and Pierre et Vacances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pierre et Vacances 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 Pierre Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pierre et Vacances has no effect on the direction of Hotel Majestic i.e., Hotel Majestic and Pierre Et go up and down completely randomly.
Pair Corralation between Hotel Majestic and Pierre Et
Assuming the 90 days trading horizon Hotel Majestic Cannes is expected to generate 0.98 times more return on investment than Pierre Et. However, Hotel Majestic Cannes is 1.02 times less risky than Pierre Et. It trades about 0.08 of its potential returns per unit of risk. Pierre et Vacances is currently generating about 0.08 per unit of risk. If you would invest 500,000 in Hotel Majestic Cannes on November 3, 2024 and sell it today you would earn a total of 20,000 from holding Hotel Majestic Cannes or generate 4.0% 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. Pierre et Vacances
Performance |
| Timeline |
| Hotel Majestic Cannes |
| Pierre et Vacances |
Hotel Majestic and Pierre Et Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Majestic and Pierre Et
The main advantage of trading using opposite Hotel Majestic and Pierre Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Majestic position performs unexpectedly, Pierre Et 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 Pierre Et will offset losses from the drop in Pierre Et's long position.| Hotel Majestic vs. Gaztransport Technigaz SAS | Hotel Majestic vs. Les Hotels Bav | Hotel Majestic vs. Ubisoft Entertainment | Hotel Majestic vs. Metalliance SA |
| Pierre Et vs. Soditech SA | Pierre Et vs. Parx Plastics NV | Pierre Et vs. Groupe Pizzorno Environnement | Pierre Et vs. Mauna Kea Technologies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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