Correlation Between NH HOTEL and Cooper Standard
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and Cooper Standard 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 NH HOTEL and Cooper Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and Cooper Standard Holdings, you can compare the effects of market volatilities on NH HOTEL and Cooper Standard 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 NH HOTEL with a short position of Cooper Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and Cooper Standard.
Diversification Opportunities for NH HOTEL and Cooper Standard
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NH5 and Cooper is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and Cooper Standard Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Standard Holdings and NH 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 NH HOTEL GROUP are associated (or correlated) with Cooper Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Standard Holdings has no effect on the direction of NH HOTEL i.e., NH HOTEL and Cooper Standard go up and down completely randomly.
Pair Corralation between NH HOTEL and Cooper Standard
Assuming the 90 days trading horizon NH HOTEL is expected to generate 2.18 times less return on investment than Cooper Standard. But when comparing it to its historical volatility, NH HOTEL GROUP is 2.05 times less risky than Cooper Standard. It trades about 0.09 of its potential returns per unit of risk. Cooper Standard Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,240 in Cooper Standard Holdings on August 30, 2024 and sell it today you would earn a total of 110.00 from holding Cooper Standard Holdings or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NH HOTEL GROUP vs. Cooper Standard Holdings
Performance |
| Timeline |
| NH HOTEL GROUP |
| Cooper Standard Holdings |
NH HOTEL and Cooper Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and Cooper Standard
The main advantage of trading using opposite NH HOTEL and Cooper Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, Cooper Standard 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 Cooper Standard will offset losses from the drop in Cooper Standard's long position.| NH HOTEL vs. Apple Inc | NH HOTEL vs. Apple Inc | NH HOTEL vs. Superior Plus Corp | NH HOTEL vs. SIVERS SEMICONDUCTORS AB |
| Cooper Standard vs. JIAHUA STORES | Cooper Standard vs. COMINTL BANK ADR1 | Cooper Standard vs. Chiba Bank | Cooper Standard vs. The Hanover Insurance |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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