Correlation Between NH HOTEL and Yakult Honsha
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and Yakult Honsha 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 Yakult Honsha 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 Yakult Honsha CoLtd, you can compare the effects of market volatilities on NH HOTEL and Yakult Honsha 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 Yakult Honsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and Yakult Honsha.
Diversification Opportunities for NH HOTEL and Yakult Honsha
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NH5 and Yakult is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and Yakult Honsha CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yakult Honsha CoLtd 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 Yakult Honsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yakult Honsha CoLtd has no effect on the direction of NH HOTEL i.e., NH HOTEL and Yakult Honsha go up and down completely randomly.
Pair Corralation between NH HOTEL and Yakult Honsha
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 0.43 times more return on investment than Yakult Honsha. However, NH HOTEL GROUP is 2.33 times less risky than Yakult Honsha. It trades about -0.02 of its potential returns per unit of risk. Yakult Honsha CoLtd is currently generating about -0.25 per unit of risk. If you would invest 623.00 in NH HOTEL GROUP on October 23, 2024 and sell it today you would lose (1.00) from holding NH HOTEL GROUP or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
NH HOTEL GROUP vs. Yakult Honsha CoLtd
Performance |
| Timeline |
| NH HOTEL GROUP |
| Yakult Honsha CoLtd |
NH HOTEL and Yakult Honsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and Yakult Honsha
The main advantage of trading using opposite NH HOTEL and Yakult Honsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, Yakult Honsha 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 Yakult Honsha will offset losses from the drop in Yakult Honsha's long position.| NH HOTEL vs. PennantPark Investment | NH HOTEL vs. Yuexiu Transport Infrastructure | NH HOTEL vs. Apollo Investment Corp | NH HOTEL vs. SCIENCE IN SPORT |
| Yakult Honsha vs. JLF INVESTMENT | Yakult Honsha vs. SLR Investment Corp | Yakult Honsha vs. New Residential Investment | Yakult Honsha vs. Universal Insurance Holdings |
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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