Correlation Between MIRAMAR HOTEL and Regal Hotels
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Regal 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 MIRAMAR HOTEL and Regal Hotels 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 Regal Hotels International, you can compare the effects of market volatilities on MIRAMAR HOTEL and Regal 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 MIRAMAR HOTEL with a short position of Regal Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Regal Hotels.
Diversification Opportunities for MIRAMAR HOTEL and Regal Hotels
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MIRAMAR and Regal is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Regal Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Hotels Interna 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 Regal Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Hotels Interna has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Regal Hotels go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and Regal Hotels
Assuming the 90 days trading horizon MIRAMAR HOTEL is expected to generate 96.39 times less return on investment than Regal Hotels. But when comparing it to its historical volatility, MIRAMAR HOTEL INV is 2.77 times less risky than Regal Hotels. It trades about 0.0 of its potential returns per unit of risk. Regal Hotels International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 28.00 in Regal Hotels International on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Regal Hotels International or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. Regal Hotels International
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| Regal Hotels Interna |
MIRAMAR HOTEL and Regal Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and Regal Hotels
The main advantage of trading using opposite MIRAMAR HOTEL and Regal Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, Regal 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 Regal Hotels will offset losses from the drop in Regal Hotels' long position.| MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Microsoft | MIRAMAR HOTEL vs. Microsoft |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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