Correlation Between Olympia Financial and American Hotel
Can any of the company-specific risk be diversified away by investing in both Olympia Financial and American Hotel 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 Olympia Financial and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and American Hotel Income, you can compare the effects of market volatilities on Olympia Financial and American Hotel 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 Olympia Financial with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and American Hotel.
Diversification Opportunities for Olympia Financial and American Hotel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Olympia and American is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Olympia Financial 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 Olympia Financial Group are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Olympia Financial i.e., Olympia Financial and American Hotel go up and down completely randomly.
Pair Corralation between Olympia Financial and American Hotel
Assuming the 90 days trading horizon Olympia Financial is expected to generate 4.11 times less return on investment than American Hotel. But when comparing it to its historical volatility, Olympia Financial Group is 3.45 times less risky than American Hotel. It trades about 0.24 of its potential returns per unit of risk. American Hotel Income is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 49.00 in American Hotel Income on October 10, 2024 and sell it today you would earn a total of 16.00 from holding American Hotel Income or generate 32.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. American Hotel Income
Performance |
| Timeline |
| Olympia Financial |
| American Hotel Income |
Olympia Financial and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and American Hotel
The main advantage of trading using opposite Olympia Financial and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Accord Financial Corp |
| American Hotel vs. Aya Gold Silver | American Hotel vs. Postmedia Network Canada | American Hotel vs. Metalero Mining Corp | American Hotel vs. Advent Wireless |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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