Correlation Between NH HOTEL and USS
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and USS 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 USS 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 USS Co, you can compare the effects of market volatilities on NH HOTEL and USS 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 USS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and USS.
Diversification Opportunities for NH HOTEL and USS
Very good diversification
The 3 months correlation between NH5 and USS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of NH HOTEL i.e., NH HOTEL and USS go up and down completely randomly.
Pair Corralation between NH HOTEL and USS
Assuming the 90 days trading horizon NH HOTEL is expected to generate 3.55 times less return on investment than USS. In addition to that, NH HOTEL is 2.81 times more volatile than USS Co. It trades about 0.05 of its total potential returns per unit of risk. USS Co is currently generating about 0.5 per unit of volatility. If you would invest 775.00 in USS Co on September 5, 2024 and sell it today you would earn a total of 100.00 from holding USS Co or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. USS Co
Performance |
| Timeline |
| NH HOTEL GROUP |
| USS Co |
NH HOTEL and USS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and USS
The main advantage of trading using opposite NH HOTEL and USS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, USS 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 USS will offset losses from the drop in USS's long position.The idea behind NH HOTEL GROUP and USS Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| USS vs. Park Hotels Resorts | USS vs. Luckin Coffee | USS vs. NH HOTEL GROUP | USS vs. Summit Hotel Properties |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |