Correlation Between NH HOTEL and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on NH HOTEL and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and KGHM Polska.
Diversification Opportunities for NH HOTEL and KGHM Polska
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NH5 and KGHM is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of NH HOTEL i.e., NH HOTEL and KGHM Polska go up and down completely randomly.
Pair Corralation between NH HOTEL and KGHM Polska
Assuming the 90 days trading horizon NH HOTEL is expected to generate 299.35 times less return on investment than KGHM Polska. But when comparing it to its historical volatility, NH HOTEL GROUP is 4.06 times less risky than KGHM Polska. It trades about 0.0 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,748 in KGHM Polska Miedz on November 2, 2024 and sell it today you would earn a total of 292.00 from holding KGHM Polska Miedz or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. KGHM Polska Miedz
Performance |
| Timeline |
| NH HOTEL GROUP |
| KGHM Polska Miedz |
NH HOTEL and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and KGHM Polska
The main advantage of trading using opposite NH HOTEL and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| NH HOTEL vs. UMC Electronics Co | NH HOTEL vs. CHINA TONTINE WINES | NH HOTEL vs. Treasury Wine Estates | NH HOTEL vs. STMicroelectronics NV |
| KGHM Polska vs. Safety Insurance Group | KGHM Polska vs. Prosiebensat 1 Media | KGHM Polska vs. SQUIRREL MEDIA SA | KGHM Polska vs. 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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