Correlation Between MIRAMAR HOTEL and REGAL HOTEL
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and REGAL HOTEL 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 HOTEL 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 HOTEL INTL, you can compare the effects of market volatilities on MIRAMAR HOTEL and REGAL HOTEL 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 HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and REGAL HOTEL.
Diversification Opportunities for MIRAMAR HOTEL and REGAL HOTEL
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MIRAMAR and REGAL is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and REGAL HOTEL INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL HOTEL INTL 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 HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL HOTEL INTL has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and REGAL HOTEL go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and REGAL HOTEL
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to generate 1.09 times more return on investment than REGAL HOTEL. However, MIRAMAR HOTEL is 1.09 times more volatile than REGAL HOTEL INTL. It trades about 0.07 of its potential returns per unit of risk. REGAL HOTEL INTL is currently generating about 0.01 per unit of risk. If you would invest 53.00 in MIRAMAR HOTEL INV on August 27, 2024 and sell it today you would earn a total of 60.00 from holding MIRAMAR HOTEL INV or generate 113.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. REGAL HOTEL INTL
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| REGAL HOTEL INTL |
MIRAMAR HOTEL and REGAL HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and REGAL HOTEL
The main advantage of trading using opposite MIRAMAR HOTEL and REGAL HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, REGAL HOTEL 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 HOTEL will offset losses from the drop in REGAL HOTEL's long position.| MIRAMAR HOTEL vs. Sinopec Shanghai Petrochemical | MIRAMAR HOTEL vs. QURATE RETAIL INC | MIRAMAR HOTEL vs. PICKN PAY STORES | MIRAMAR HOTEL vs. NISSAN CHEMICAL IND |
| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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