Correlation Between NH Hoteles and Plasticos Compuestos
Can any of the company-specific risk be diversified away by investing in both NH Hoteles and Plasticos Compuestos 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 Hoteles and Plasticos Compuestos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Hoteles and Plasticos Compuestos SA, you can compare the effects of market volatilities on NH Hoteles and Plasticos Compuestos 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 Hoteles with a short position of Plasticos Compuestos. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Hoteles and Plasticos Compuestos.
Diversification Opportunities for NH Hoteles and Plasticos Compuestos
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NHH and Plasticos is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NH Hoteles and Plasticos Compuestos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plasticos Compuestos and NH Hoteles 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 Hoteles are associated (or correlated) with Plasticos Compuestos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plasticos Compuestos has no effect on the direction of NH Hoteles i.e., NH Hoteles and Plasticos Compuestos go up and down completely randomly.
Pair Corralation between NH Hoteles and Plasticos Compuestos
Assuming the 90 days trading horizon NH Hoteles is expected to generate 1476.0 times less return on investment than Plasticos Compuestos. But when comparing it to its historical volatility, NH Hoteles is 3.12 times less risky than Plasticos Compuestos. It trades about 0.0 of its potential returns per unit of risk. Plasticos Compuestos SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 101.00 in Plasticos Compuestos SA on October 26, 2024 and sell it today you would earn a total of 3.00 from holding Plasticos Compuestos SA or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Hoteles vs. Plasticos Compuestos SA
Performance |
| Timeline |
| NH Hoteles |
| Plasticos Compuestos |
NH Hoteles and Plasticos Compuestos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Hoteles and Plasticos Compuestos
The main advantage of trading using opposite NH Hoteles and Plasticos Compuestos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Hoteles position performs unexpectedly, Plasticos Compuestos 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 Plasticos Compuestos will offset losses from the drop in Plasticos Compuestos' long position.| NH Hoteles vs. Melia Hotels | NH Hoteles vs. Indra A | NH Hoteles vs. Fomento de Construcciones | NH Hoteles vs. Acerinox |
| Plasticos Compuestos vs. Naturhouse Health SA | Plasticos Compuestos vs. Cellnex Telecom SA | Plasticos Compuestos vs. Media Investment Optimization | Plasticos Compuestos vs. Millenium Hotels Real |
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 Stocks Directory module to find actively traded stocks across global markets.
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