Correlation Between MIRAMAR HOTEL and Air Transport
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Air Transport 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 MIRAMAR HOTEL and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIRAMAR HOTEL INV and Air Transport Services, you can compare the effects of market volatilities on MIRAMAR HOTEL and Air Transport 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 MIRAMAR HOTEL with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Air Transport.
Diversification Opportunities for MIRAMAR HOTEL and Air Transport
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MIRAMAR and Air is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Air Transport go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and Air Transport
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to under-perform the Air Transport. In addition to that, MIRAMAR HOTEL is 1.09 times more volatile than Air Transport Services. It trades about -0.06 of its total potential returns per unit of risk. Air Transport Services is currently generating about 0.15 per unit of volatility. If you would invest 2,060 in Air Transport Services on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Air Transport Services or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. Air Transport Services
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| Air Transport Services |
MIRAMAR HOTEL and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and Air Transport
The main advantage of trading using opposite MIRAMAR HOTEL and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| MIRAMAR HOTEL vs. UNITED RENTALS | MIRAMAR HOTEL vs. Insurance Australia Group | MIRAMAR HOTEL vs. Air Lease | MIRAMAR HOTEL vs. The Hanover Insurance |
| Air Transport vs. Aena SME SA | Air Transport vs. Superior Plus Corp | Air Transport vs. SIVERS SEMICONDUCTORS AB | Air Transport vs. Norsk Hydro ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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