Correlation Between MotorCycle Holdings and Hotel Property
Can any of the company-specific risk be diversified away by investing in both MotorCycle Holdings and Hotel Property 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 MotorCycle Holdings and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MotorCycle Holdings and Hotel Property Investments, you can compare the effects of market volatilities on MotorCycle Holdings and Hotel Property 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 MotorCycle Holdings with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of MotorCycle Holdings and Hotel Property.
Diversification Opportunities for MotorCycle Holdings and Hotel Property
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MotorCycle and Hotel is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MotorCycle Holdings and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and MotorCycle Holdings 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 MotorCycle Holdings are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of MotorCycle Holdings i.e., MotorCycle Holdings and Hotel Property go up and down completely randomly.
Pair Corralation between MotorCycle Holdings and Hotel Property
Assuming the 90 days trading horizon MotorCycle Holdings is expected to generate 1.3 times less return on investment than Hotel Property. In addition to that, MotorCycle Holdings is 2.11 times more volatile than Hotel Property Investments. It trades about 0.01 of its total potential returns per unit of risk. Hotel Property Investments is currently generating about 0.03 per unit of volatility. If you would invest 310.00 in Hotel Property Investments on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Hotel Property Investments or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MotorCycle Holdings vs. Hotel Property Investments
Performance |
| Timeline |
| MotorCycle Holdings |
| Hotel Property Inves |
MotorCycle Holdings and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MotorCycle Holdings and Hotel Property
The main advantage of trading using opposite MotorCycle Holdings and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MotorCycle Holdings position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| MotorCycle Holdings vs. Westpac Banking | MotorCycle Holdings vs. Champion Iron | MotorCycle Holdings vs. iShares Global Healthcare | MotorCycle Holdings vs. Peel Mining |
| Hotel Property vs. GDI Property Group | Hotel Property vs. Champion Iron | Hotel Property vs. iShares Global Healthcare | Hotel Property vs. Peel Mining |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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