Correlation Between MIRAMAR HOTEL and ITV Plc
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and ITV Plc 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 ITV Plc 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 ITV plc, you can compare the effects of market volatilities on MIRAMAR HOTEL and ITV Plc 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 ITV Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and ITV Plc.
Diversification Opportunities for MIRAMAR HOTEL and ITV Plc
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MIRAMAR and ITV is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and ITV plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV plc 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 ITV Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV plc has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and ITV Plc go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and ITV Plc
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to generate 1.0 times more return on investment than ITV Plc. However, MIRAMAR HOTEL is 1.0 times more volatile than ITV plc. It trades about 0.07 of its potential returns per unit of risk. ITV plc is currently generating about 0.06 per unit of risk. If you would invest 71.00 in MIRAMAR HOTEL INV on September 15, 2024 and sell it today you would earn a total of 42.00 from holding MIRAMAR HOTEL INV or generate 59.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. ITV plc
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| ITV plc |
MIRAMAR HOTEL and ITV Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and ITV Plc
The main advantage of trading using opposite MIRAMAR HOTEL and ITV Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, ITV Plc 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 ITV Plc will offset losses from the drop in ITV Plc's long position.| MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc |
| ITV Plc vs. MIRAMAR HOTEL INV | ITV Plc vs. MELIA HOTELS | ITV Plc vs. Wyndham Hotels Resorts | ITV Plc vs. PPHE HOTEL GROUP |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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