Correlation Between Marwyn Value and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Marwyn Value and PPHE 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 Marwyn Value and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marwyn Value Investors and PPHE Hotel Group, you can compare the effects of market volatilities on Marwyn Value and PPHE 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 Marwyn Value with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marwyn Value and PPHE Hotel.
Diversification Opportunities for Marwyn Value and PPHE Hotel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marwyn and PPHE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Marwyn Value Investors and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group and Marwyn Value 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 Marwyn Value Investors are associated (or correlated) with PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Marwyn Value i.e., Marwyn Value and PPHE Hotel go up and down completely randomly.
Pair Corralation between Marwyn Value and PPHE Hotel
Assuming the 90 days trading horizon Marwyn Value Investors is expected to generate 0.73 times more return on investment than PPHE Hotel. However, Marwyn Value Investors is 1.37 times less risky than PPHE Hotel. It trades about 0.44 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about -0.12 per unit of risk. If you would invest 8,800 in Marwyn Value Investors on October 13, 2024 and sell it today you would earn a total of 1,100 from holding Marwyn Value Investors or generate 12.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Marwyn Value Investors vs. PPHE Hotel Group
Performance |
Timeline |
Marwyn Value Investors |
PPHE Hotel Group |
Marwyn Value and PPHE Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marwyn Value and PPHE Hotel
The main advantage of trading using opposite Marwyn Value and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marwyn Value position performs unexpectedly, PPHE 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.Marwyn Value vs. Cornish Metals | Marwyn Value vs. Europa Metals | Marwyn Value vs. CNH Industrial NV | Marwyn Value vs. Spirent Communications plc |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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