Correlation Between NH Hotel and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both NH Hotel and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on NH Hotel and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Hotel and Arrow Electronics.
Diversification Opportunities for NH Hotel and Arrow Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NHHEF and Arrow is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NH Hotel Group and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of NH Hotel i.e., NH Hotel and Arrow Electronics go up and down completely randomly.
Pair Corralation between NH Hotel and Arrow Electronics
If you would invest 11,314 in Arrow Electronics on November 4, 2024 and sell it today you would earn a total of 341.00 from holding Arrow Electronics or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Hotel Group vs. Arrow Electronics
Performance |
| Timeline |
| NH Hotel Group |
| Arrow Electronics |
NH Hotel and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Hotel and Arrow Electronics
The main advantage of trading using opposite NH Hotel and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Hotel position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| NH Hotel vs. Life Insurance | NH Hotel vs. Old Dominion Freight | NH Hotel vs. Pekin Life Insurance | NH Hotel vs. Vulcan Materials |
| Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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