Correlation Between Netz Hotels and Payment Financial
Can any of the company-specific risk be diversified away by investing in both Netz Hotels and Payment Financial 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 Payment Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netz Hotels and Payment Financial Technologies, you can compare the effects of market volatilities on Netz Hotels and Payment Financial 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 Payment Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netz Hotels and Payment Financial.
Diversification Opportunities for Netz Hotels and Payment Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Netz and Payment is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Netz Hotels and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial 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 Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of Netz Hotels i.e., Netz Hotels and Payment Financial go up and down completely randomly.
Pair Corralation between Netz Hotels and Payment Financial
Assuming the 90 days trading horizon Netz Hotels is expected to generate 2.17 times less return on investment than Payment Financial. In addition to that, Netz Hotels is 1.09 times more volatile than Payment Financial Technologies. It trades about 0.09 of its total potential returns per unit of risk. Payment Financial Technologies is currently generating about 0.21 per unit of volatility. If you would invest 24,971 in Payment Financial Technologies on August 29, 2024 and sell it today you would earn a total of 9,463 from holding Payment Financial Technologies or generate 37.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.83% |
Values | Daily Returns |
Netz Hotels vs. Payment Financial Technologies
Performance |
Timeline |
Netz Hotels |
Payment Financial |
Netz Hotels and Payment Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netz Hotels and Payment Financial
The main advantage of trading using opposite Netz Hotels and Payment Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netz Hotels position performs unexpectedly, Payment Financial 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 Payment Financial will offset losses from the drop in Payment Financial's long position.Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Itay Financial AA | Netz Hotels vs. B Communications | Netz Hotels vs. Holmes Place International |
Payment Financial vs. Automatic Bank Services | Payment Financial vs. Opal Balance | Payment Financial vs. B Communications | Payment Financial vs. Holmes Place International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |