Correlation Between PPHE Hotel and FinecoBank SpA
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and FinecoBank SpA 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 PPHE Hotel and FinecoBank SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and FinecoBank SpA, you can compare the effects of market volatilities on PPHE Hotel and FinecoBank SpA 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 PPHE Hotel with a short position of FinecoBank SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and FinecoBank SpA.
Diversification Opportunities for PPHE Hotel and FinecoBank SpA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PPHE and FinecoBank is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and FinecoBank SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinecoBank SpA and PPHE Hotel 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 PPHE Hotel Group are associated (or correlated) with FinecoBank SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinecoBank SpA has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and FinecoBank SpA go up and down completely randomly.
Pair Corralation between PPHE Hotel and FinecoBank SpA
Assuming the 90 days trading horizon PPHE Hotel is expected to generate 2.66 times less return on investment than FinecoBank SpA. In addition to that, PPHE Hotel is 1.04 times more volatile than FinecoBank SpA. It trades about 0.01 of its total potential returns per unit of risk. FinecoBank SpA is currently generating about 0.03 per unit of volatility. If you would invest 1,509 in FinecoBank SpA on October 27, 2024 and sell it today you would earn a total of 320.00 from holding FinecoBank SpA or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. FinecoBank SpA
Performance |
| Timeline |
| PPHE Hotel Group |
| FinecoBank SpA |
PPHE Hotel and FinecoBank SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and FinecoBank SpA
The main advantage of trading using opposite PPHE Hotel and FinecoBank SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, FinecoBank SpA 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 FinecoBank SpA will offset losses from the drop in FinecoBank SpA's long position.| PPHE Hotel vs. International Consolidated Airlines | PPHE Hotel vs. Tata Steel Limited | PPHE Hotel vs. Geely Automobile Holdings | PPHE Hotel vs. Westlake Chemical Corp |
| FinecoBank SpA vs. Oxford Technology 2 | FinecoBank SpA vs. Vitec Software Group | FinecoBank SpA vs. Cognizant Technology Solutions | FinecoBank SpA vs. Monster Beverage Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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