Correlation Between Oceania Healthcare and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Oceania Healthcare and Hotel Property 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 Oceania Healthcare and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceania Healthcare and Hotel Property Investments, you can compare the effects of market volatilities on Oceania Healthcare and Hotel Property 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 Oceania Healthcare with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceania Healthcare and Hotel Property.
Diversification Opportunities for Oceania Healthcare and Hotel Property
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oceania and Hotel is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oceania Healthcare and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and Oceania Healthcare 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 Oceania Healthcare are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Oceania Healthcare i.e., Oceania Healthcare and Hotel Property go up and down completely randomly.
Pair Corralation between Oceania Healthcare and Hotel Property
Assuming the 90 days trading horizon Oceania Healthcare is expected to generate 3.21 times less return on investment than Hotel Property. In addition to that, Oceania Healthcare is 1.98 times more volatile than Hotel Property Investments. It trades about 0.0 of its total potential returns per unit of risk. Hotel Property Investments is currently generating about 0.03 per unit of volatility. If you would invest 315.00 in Hotel Property Investments on September 5, 2024 and sell it today you would earn a total of 58.00 from holding Hotel Property Investments or generate 18.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oceania Healthcare vs. Hotel Property Investments
Performance |
| Timeline |
| Oceania Healthcare |
| Hotel Property Inves |
Oceania Healthcare and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceania Healthcare and Hotel Property
The main advantage of trading using opposite Oceania Healthcare and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceania Healthcare position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| Oceania Healthcare vs. Macquarie Group | Oceania Healthcare vs. Macquarie Group Ltd | Oceania Healthcare vs. Commonwealth Bank | Oceania Healthcare vs. Rio Tinto |
| Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Carindale Property Trust |
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.
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