Correlation Between INSURANCE AUST and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Dalata Hotel 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 INSURANCE AUST and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and Dalata Hotel Group, you can compare the effects of market volatilities on INSURANCE AUST and Dalata Hotel 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 INSURANCE AUST with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Dalata Hotel.
Diversification Opportunities for INSURANCE AUST and Dalata Hotel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INSURANCE and Dalata is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Dalata Hotel go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Dalata Hotel
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 1.15 times more return on investment than Dalata Hotel. However, INSURANCE AUST is 1.15 times more volatile than Dalata Hotel Group. It trades about 0.22 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.09 per unit of risk. If you would invest 450.00 in INSURANCE AUST GRP on August 29, 2024 and sell it today you would earn a total of 38.00 from holding INSURANCE AUST GRP or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. Dalata Hotel Group
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Dalata Hotel Group |
INSURANCE AUST and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Dalata Hotel
The main advantage of trading using opposite INSURANCE AUST and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Superior Plus Corp | INSURANCE AUST vs. SIVERS SEMICONDUCTORS AB |
| Dalata Hotel vs. Jacquet Metal Service | Dalata Hotel vs. GREENX METALS LTD | Dalata Hotel vs. Internet Thailand PCL | Dalata Hotel vs. GALENA MINING LTD |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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