Correlation Between NH HOTEL and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and DALATA 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 NH HOTEL and DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on NH HOTEL and DALATA 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 NH HOTEL with a short position of DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and DALATA HOTEL.
Diversification Opportunities for NH HOTEL and DALATA HOTEL
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NH5 and DALATA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of NH HOTEL i.e., NH HOTEL and DALATA HOTEL go up and down completely randomly.
Pair Corralation between NH HOTEL and DALATA HOTEL
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 0.9 times more return on investment than DALATA HOTEL. However, NH HOTEL GROUP is 1.1 times less risky than DALATA HOTEL. It trades about 0.05 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.03 per unit of risk. If you would invest 359.00 in NH HOTEL GROUP on November 6, 2024 and sell it today you would earn a total of 265.00 from holding NH HOTEL GROUP or generate 73.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. DALATA HOTEL
Performance |
| Timeline |
| NH HOTEL GROUP |
| DALATA HOTEL |
NH HOTEL and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and DALATA HOTEL
The main advantage of trading using opposite NH HOTEL and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, DALATA 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| NH HOTEL vs. MOLSON RS BEVERAGE | NH HOTEL vs. MCEWEN MINING INC | NH HOTEL vs. STGEORGE MINING LTD | NH HOTEL vs. Tsingtao Brewery |
| DALATA HOTEL vs. Harmony Gold Mining | DALATA HOTEL vs. De Grey Mining | DALATA HOTEL vs. THAI BEVERAGE | DALATA HOTEL vs. MAG SILVER |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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