Correlation Between Netz Hotels and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Netz Hotels and Homebiogas 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 Homebiogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netz Hotels and Homebiogas, you can compare the effects of market volatilities on Netz Hotels and Homebiogas 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 Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netz Hotels and Homebiogas.
Diversification Opportunities for Netz Hotels and Homebiogas
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Netz and Homebiogas is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Netz Hotels and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas 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 Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Netz Hotels i.e., Netz Hotels and Homebiogas go up and down completely randomly.
Pair Corralation between Netz Hotels and Homebiogas
Assuming the 90 days trading horizon Netz Hotels is expected to generate 1.86 times more return on investment than Homebiogas. However, Netz Hotels is 1.86 times more volatile than Homebiogas. It trades about 0.04 of its potential returns per unit of risk. Homebiogas is currently generating about -0.14 per unit of risk. If you would invest 2,700 in Netz Hotels on August 31, 2024 and sell it today you would earn a total of 630.00 from holding Netz Hotels or generate 23.33% 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. Homebiogas
Performance |
| Timeline |
| Netz Hotels |
| Homebiogas |
Netz Hotels and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netz Hotels and Homebiogas
The main advantage of trading using opposite Netz Hotels and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netz Hotels position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' long position.| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Brainsway | Netz Hotels vs. Mivne Real Estate | Netz Hotels vs. Photomyne |
| Homebiogas vs. Petrochemical | Homebiogas vs. B Communications | Homebiogas vs. Ormat Technologies | Homebiogas vs. Unicorn Technologies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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