Correlation Between PPHE Hotel and Ams AG
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and Ams AG 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 Ams AG 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 Ams AG, you can compare the effects of market volatilities on PPHE Hotel and Ams AG 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 Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Ams AG.
Diversification Opportunities for PPHE Hotel and Ams AG
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and Ams is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ams AG 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 Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ams AG has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and Ams AG go up and down completely randomly.
Pair Corralation between PPHE Hotel and Ams AG
Assuming the 90 days trading horizon PPHE Hotel Group is expected to under-perform the Ams AG. But the stock apears to be less risky and, when comparing its historical volatility, PPHE Hotel Group is 1.91 times less risky than Ams AG. The stock trades about -0.22 of its potential returns per unit of risk. The Ams AG is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 621.00 in Ams AG on October 25, 2024 and sell it today you would earn a total of 31.00 from holding Ams AG or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
PPHE Hotel Group vs. Ams AG
Performance |
| Timeline |
| PPHE Hotel Group |
| Ams AG |
PPHE Hotel and Ams AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Ams AG
The main advantage of trading using opposite PPHE Hotel and Ams AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, Ams AG 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 Ams AG will offset losses from the drop in Ams AG's long position.| PPHE Hotel vs. GreenX Metals | PPHE Hotel vs. Air Products Chemicals | PPHE Hotel vs. Lundin Mining Corp | PPHE Hotel vs. Pfeiffer Vacuum Technology |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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