Correlation Between Gruppo Mutuionline and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Gruppo Mutuionline and Hyatt Hotels 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 Gruppo Mutuionline and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gruppo Mutuionline SpA and Hyatt Hotels, you can compare the effects of market volatilities on Gruppo Mutuionline and Hyatt Hotels 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 Gruppo Mutuionline with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo Mutuionline and Hyatt Hotels.
Diversification Opportunities for Gruppo Mutuionline and Hyatt Hotels
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gruppo and Hyatt is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Gruppo Mutuionline 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 Gruppo Mutuionline SpA are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Gruppo Mutuionline i.e., Gruppo Mutuionline and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Gruppo Mutuionline and Hyatt Hotels
Assuming the 90 days trading horizon Gruppo Mutuionline SpA is expected to generate 1.22 times more return on investment than Hyatt Hotels. However, Gruppo Mutuionline is 1.22 times more volatile than Hyatt Hotels. It trades about 0.09 of its potential returns per unit of risk. Hyatt Hotels is currently generating about 0.06 per unit of risk. If you would invest 3,595 in Gruppo Mutuionline SpA on September 22, 2024 and sell it today you would earn a total of 120.00 from holding Gruppo Mutuionline SpA or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gruppo Mutuionline SpA vs. Hyatt Hotels
Performance |
| Timeline |
| Gruppo Mutuionline SpA |
| Hyatt Hotels |
Gruppo Mutuionline and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruppo Mutuionline and Hyatt Hotels
The main advantage of trading using opposite Gruppo Mutuionline and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo Mutuionline position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc | Gruppo Mutuionline vs. Apple Inc |
| Hyatt Hotels vs. Xenia Hotels Resorts | Hyatt Hotels vs. CODERE ONLINE LUX | Hyatt Hotels vs. Dalata Hotel Group | Hyatt Hotels vs. Gruppo Mutuionline SpA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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