Correlation Between MIRAMAR HOTEL and Fastenal
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Fastenal 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 Fastenal 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 Fastenal Company, you can compare the effects of market volatilities on MIRAMAR HOTEL and Fastenal 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 Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Fastenal.
Diversification Opportunities for MIRAMAR HOTEL and Fastenal
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MIRAMAR and Fastenal is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Fastenal go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and Fastenal
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to generate 2.13 times more return on investment than Fastenal. However, MIRAMAR HOTEL is 2.13 times more volatile than Fastenal Company. It trades about 0.1 of its potential returns per unit of risk. Fastenal Company is currently generating about 0.1 per unit of risk. If you would invest 71.00 in MIRAMAR HOTEL INV on September 3, 2024 and sell it today you would earn a total of 41.00 from holding MIRAMAR HOTEL INV or generate 57.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. Fastenal Company
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| Fastenal |
MIRAMAR HOTEL and Fastenal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and Fastenal
The main advantage of trading using opposite MIRAMAR HOTEL and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, Fastenal 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 Fastenal will offset losses from the drop in Fastenal's long position.| MIRAMAR HOTEL vs. Liberty Broadband | MIRAMAR HOTEL vs. Broadcom | MIRAMAR HOTEL vs. Gaztransport Technigaz SA | MIRAMAR HOTEL vs. TYSON FOODS A |
| Fastenal vs. MIRAMAR HOTEL INV | Fastenal vs. Sunstone Hotel Investors | Fastenal vs. Playa Hotels Resorts | Fastenal vs. 24SEVENOFFICE GROUP AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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