Correlation Between Netz Hotels and XTL Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Netz Hotels and XTL Biopharmaceutica 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 XTL Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netz Hotels and XTL Biopharmaceuticals, you can compare the effects of market volatilities on Netz Hotels and XTL Biopharmaceutica 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 XTL Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netz Hotels and XTL Biopharmaceutica.
Diversification Opportunities for Netz Hotels and XTL Biopharmaceutica
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netz and XTL is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Netz Hotels and XTL Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTL Biopharmaceuticals 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 XTL Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTL Biopharmaceuticals has no effect on the direction of Netz Hotels i.e., Netz Hotels and XTL Biopharmaceutica go up and down completely randomly.
Pair Corralation between Netz Hotels and XTL Biopharmaceutica
Assuming the 90 days trading horizon Netz Hotels is expected to generate 0.7 times more return on investment than XTL Biopharmaceutica. However, Netz Hotels is 1.42 times less risky than XTL Biopharmaceutica. It trades about 0.09 of its potential returns per unit of risk. XTL Biopharmaceuticals is currently generating about -0.13 per unit of risk. If you would invest 3,000 in Netz Hotels on August 29, 2024 and sell it today you would earn a total of 410.00 from holding Netz Hotels or generate 13.67% 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. XTL Biopharmaceuticals
Performance |
| Timeline |
| Netz Hotels |
| XTL Biopharmaceuticals |
Netz Hotels and XTL Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netz Hotels and XTL Biopharmaceutica
The main advantage of trading using opposite Netz Hotels and XTL Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netz Hotels position performs unexpectedly, XTL Biopharmaceutica 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 XTL Biopharmaceutica will offset losses from the drop in XTL Biopharmaceutica'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 |
| XTL Biopharmaceutica vs. XTL Biopharmaceuticals Ltd | XTL Biopharmaceutica vs. Intercure | XTL Biopharmaceutica vs. BioLine RX | XTL Biopharmaceutica vs. Foresight Autonomous Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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