Correlation Between NH HOTEL and Cleanaway Waste
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and Cleanaway Waste 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 Cleanaway Waste 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 Cleanaway Waste Management, you can compare the effects of market volatilities on NH HOTEL and Cleanaway Waste 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 Cleanaway Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and Cleanaway Waste.
Diversification Opportunities for NH HOTEL and Cleanaway Waste
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NH5 and Cleanaway is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and Cleanaway Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleanaway Waste Mana 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 Cleanaway Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleanaway Waste Mana has no effect on the direction of NH HOTEL i.e., NH HOTEL and Cleanaway Waste go up and down completely randomly.
Pair Corralation between NH HOTEL and Cleanaway Waste
Assuming the 90 days trading horizon NH HOTEL is expected to generate 2.14 times less return on investment than Cleanaway Waste. In addition to that, NH HOTEL is 1.41 times more volatile than Cleanaway Waste Management. It trades about 0.06 of its total potential returns per unit of risk. Cleanaway Waste Management is currently generating about 0.18 per unit of volatility. If you would invest 170.00 in Cleanaway Waste Management on August 29, 2024 and sell it today you would earn a total of 13.00 from holding Cleanaway Waste Management or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. Cleanaway Waste Management
Performance |
| Timeline |
| NH HOTEL GROUP |
| Cleanaway Waste Mana |
NH HOTEL and Cleanaway Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and Cleanaway Waste
The main advantage of trading using opposite NH HOTEL and Cleanaway Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, Cleanaway Waste 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 Cleanaway Waste will offset losses from the drop in Cleanaway Waste's long position.| NH HOTEL vs. LEGACY IRON ORE | NH HOTEL vs. RELIANCE STEEL AL | NH HOTEL vs. LION ONE METALS | NH HOTEL vs. Japan Tobacco |
| Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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