Correlation Between NH Hotel and Legacy Education
Can any of the company-specific risk be diversified away by investing in both NH Hotel and Legacy Education 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 Legacy Education 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 Legacy Education, you can compare the effects of market volatilities on NH Hotel and Legacy Education 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 Legacy Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Hotel and Legacy Education.
Diversification Opportunities for NH Hotel and Legacy Education
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NHHEF and Legacy is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NH Hotel Group and Legacy Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legacy Education 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 Legacy Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legacy Education has no effect on the direction of NH Hotel i.e., NH Hotel and Legacy Education go up and down completely randomly.
Pair Corralation between NH Hotel and Legacy Education
If you would invest 816.00 in Legacy Education on November 3, 2024 and sell it today you would earn a total of 47.00 from holding Legacy Education or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Hotel Group vs. Legacy Education
Performance |
| Timeline |
| NH Hotel Group |
| Legacy Education |
NH Hotel and Legacy Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Hotel and Legacy Education
The main advantage of trading using opposite NH Hotel and Legacy Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Hotel position performs unexpectedly, Legacy Education 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 Legacy Education will offset losses from the drop in Legacy Education's long position.| NH Hotel vs. Lucid Group | NH Hotel vs. Franklin Wireless Corp | NH Hotel vs. Analog Devices | NH Hotel vs. Dana Inc |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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