Correlation Between NH Hoteles and Vytrus Biotech
Can any of the company-specific risk be diversified away by investing in both NH Hoteles and Vytrus Biotech 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 Vytrus Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Hoteles and Vytrus Biotech SA, you can compare the effects of market volatilities on NH Hoteles and Vytrus Biotech 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 Vytrus Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Hoteles and Vytrus Biotech.
Diversification Opportunities for NH Hoteles and Vytrus Biotech
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between NHH and Vytrus is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding NH Hoteles and Vytrus Biotech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vytrus Biotech SA 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 Vytrus Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vytrus Biotech SA has no effect on the direction of NH Hoteles i.e., NH Hoteles and Vytrus Biotech go up and down completely randomly.
Pair Corralation between NH Hoteles and Vytrus Biotech
Assuming the 90 days trading horizon NH Hoteles is expected to generate 5.98 times less return on investment than Vytrus Biotech. But when comparing it to its historical volatility, NH Hoteles is 10.64 times less risky than Vytrus Biotech. It trades about 0.22 of its potential returns per unit of risk. Vytrus Biotech SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Vytrus Biotech SA on November 5, 2024 and sell it today you would earn a total of 6.00 from holding Vytrus Biotech SA or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Hoteles vs. Vytrus Biotech SA
Performance |
| Timeline |
| NH Hoteles |
| Vytrus Biotech SA |
NH Hoteles and Vytrus Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Hoteles and Vytrus Biotech
The main advantage of trading using opposite NH Hoteles and Vytrus Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Hoteles position performs unexpectedly, Vytrus Biotech 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 Vytrus Biotech will offset losses from the drop in Vytrus Biotech's long position.| NH Hoteles vs. Melia Hotels | NH Hoteles vs. Indra A | NH Hoteles vs. Fomento de Construcciones | NH Hoteles vs. Acerinox |
| Vytrus Biotech vs. Home Capital Rentals | Vytrus Biotech vs. Media Investment Optimization | Vytrus Biotech vs. All Iron Re | Vytrus Biotech vs. Bankinter |
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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