Correlation Between Netz Hotels and GODM Investments
Can any of the company-specific risk be diversified away by investing in both Netz Hotels and GODM Investments 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 Netz Hotels and GODM Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netz Hotels and GODM Investments, you can compare the effects of market volatilities on Netz Hotels and GODM Investments 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 Netz Hotels with a short position of GODM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netz Hotels and GODM Investments.
Diversification Opportunities for Netz Hotels and GODM Investments
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netz and GODM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Netz Hotels and GODM Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GODM Investments and Netz Hotels 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 Netz Hotels are associated (or correlated) with GODM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GODM Investments has no effect on the direction of Netz Hotels i.e., Netz Hotels and GODM Investments go up and down completely randomly.
Pair Corralation between Netz Hotels and GODM Investments
Assuming the 90 days trading horizon Netz Hotels is expected to generate 2.15 times more return on investment than GODM Investments. However, Netz Hotels is 2.15 times more volatile than GODM Investments. It trades about 0.07 of its potential returns per unit of risk. GODM Investments is currently generating about -0.09 per unit of risk. If you would invest 2,450 in Netz Hotels on September 1, 2024 and sell it today you would earn a total of 880.00 from holding Netz Hotels or generate 35.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netz Hotels vs. GODM Investments
Performance |
| Timeline |
| Netz Hotels |
| GODM Investments |
Netz Hotels and GODM Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netz Hotels and GODM Investments
The main advantage of trading using opposite Netz Hotels and GODM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netz Hotels position performs unexpectedly, GODM Investments 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 GODM Investments will offset losses from the drop in GODM Investments' long position.| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Brainsway | Netz Hotels vs. Mivne Real Estate | Netz Hotels vs. Photomyne |
| GODM Investments vs. Menif Financial Services | GODM Investments vs. Accel Solutions Group | GODM Investments vs. Rani Zim Shopping | GODM Investments vs. Rapac Communication Infrastructure |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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