Correlation Between MIRAMAR HOTEL and Lancashire Holdings
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Lancashire Holdings 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 Lancashire Holdings 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 Lancashire Holdings Limited, you can compare the effects of market volatilities on MIRAMAR HOTEL and Lancashire Holdings 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 Lancashire Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Lancashire Holdings.
Diversification Opportunities for MIRAMAR HOTEL and Lancashire Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between MIRAMAR and Lancashire is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Lancashire Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancashire Holdings 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 Lancashire Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancashire Holdings has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Lancashire Holdings go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and Lancashire Holdings
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to generate 1.33 times more return on investment than Lancashire Holdings. However, MIRAMAR HOTEL is 1.33 times more volatile than Lancashire Holdings Limited. It trades about 0.07 of its potential returns per unit of risk. Lancashire Holdings Limited is currently generating about 0.06 per unit of risk. If you would invest 71.00 in MIRAMAR HOTEL INV on September 14, 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. Lancashire Holdings Limited
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| Lancashire Holdings |
MIRAMAR HOTEL and Lancashire Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and Lancashire Holdings
The main advantage of trading using opposite MIRAMAR HOTEL and Lancashire Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, Lancashire Holdings 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 Lancashire Holdings will offset losses from the drop in Lancashire Holdings' long position.| MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc |
| Lancashire Holdings vs. Playa Hotels Resorts | Lancashire Holdings vs. MIRAMAR HOTEL INV | Lancashire Holdings vs. ADRIATIC METALS LS 013355 | Lancashire Holdings vs. INTERCONT HOTELS |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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