Correlation Between Patria Bank and Compania Hoteliera
Can any of the company-specific risk be diversified away by investing in both Patria Bank and Compania Hoteliera 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 Patria Bank and Compania Hoteliera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patria Bank SA and Compania Hoteliera InterContinental, you can compare the effects of market volatilities on Patria Bank and Compania Hoteliera 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 Patria Bank with a short position of Compania Hoteliera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patria Bank and Compania Hoteliera.
Diversification Opportunities for Patria Bank and Compania Hoteliera
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Patria and Compania is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Patria Bank SA and Compania Hoteliera InterContin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Hoteliera and Patria Bank 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 Patria Bank SA are associated (or correlated) with Compania Hoteliera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Hoteliera has no effect on the direction of Patria Bank i.e., Patria Bank and Compania Hoteliera go up and down completely randomly.
Pair Corralation between Patria Bank and Compania Hoteliera
Assuming the 90 days trading horizon Patria Bank SA is expected to under-perform the Compania Hoteliera. But the stock apears to be less risky and, when comparing its historical volatility, Patria Bank SA is 4.38 times less risky than Compania Hoteliera. The stock trades about -0.14 of its potential returns per unit of risk. The Compania Hoteliera InterContinental is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Compania Hoteliera InterContinental on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Compania Hoteliera InterContinental or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patria Bank SA vs. Compania Hoteliera InterContin
Performance |
| Timeline |
| Patria Bank SA |
| Compania Hoteliera |
Patria Bank and Compania Hoteliera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patria Bank and Compania Hoteliera
The main advantage of trading using opposite Patria Bank and Compania Hoteliera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patria Bank position performs unexpectedly, Compania Hoteliera 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 Compania Hoteliera will offset losses from the drop in Compania Hoteliera's long position.| Patria Bank vs. Teraplast Bist | Patria Bank vs. Electroarges S | Patria Bank vs. Comvex SA | Patria Bank vs. Feper SA |
| Compania Hoteliera vs. Patria Bank SA | Compania Hoteliera vs. Evergent Investments SA | Compania Hoteliera vs. Safetech Innovations SA | Compania Hoteliera vs. IM Vinaria Purcari |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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