Correlation Between One Media and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both One Media and PPHE 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 One Media and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and PPHE Hotel Group, you can compare the effects of market volatilities on One Media and PPHE 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 One Media with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and PPHE Hotel.
Diversification Opportunities for One Media and PPHE Hotel
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between One and PPHE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group and One Media 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 One Media iP are associated (or correlated) with PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of One Media i.e., One Media and PPHE Hotel go up and down completely randomly.
Pair Corralation between One Media and PPHE Hotel
Assuming the 90 days trading horizon One Media iP is expected to generate 0.27 times more return on investment than PPHE Hotel. However, One Media iP is 3.71 times less risky than PPHE Hotel. It trades about 0.22 of its potential returns per unit of risk. PPHE Hotel Group is currently generating about -0.22 per unit of risk. If you would invest 415.00 in One Media iP on October 24, 2024 and sell it today you would earn a total of 10.00 from holding One Media iP or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Media iP vs. PPHE Hotel Group
Performance |
| Timeline |
| One Media iP |
| PPHE Hotel Group |
One Media and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and PPHE Hotel
The main advantage of trading using opposite One Media and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media position performs unexpectedly, PPHE 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| One Media vs. Ecclesiastical Insurance Office | One Media vs. Auto Trader Group | One Media vs. Melia Hotels | One Media vs. Dalata Hotel Group |
| PPHE Hotel vs. GreenX Metals | PPHE Hotel vs. Air Products Chemicals | PPHE Hotel vs. Lundin Mining Corp | PPHE Hotel vs. Pfeiffer Vacuum Technology |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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