Correlation Between PPHE Hotel and National Atomic
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and National Atomic 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 National Atomic 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 National Atomic Co, you can compare the effects of market volatilities on PPHE Hotel and National Atomic 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 National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and National Atomic.
Diversification Opportunities for PPHE Hotel and National Atomic
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and National is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic 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 National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and National Atomic go up and down completely randomly.
Pair Corralation between PPHE Hotel and National Atomic
Assuming the 90 days trading horizon PPHE Hotel is expected to generate 2.88 times less return on investment than National Atomic. But when comparing it to its historical volatility, PPHE Hotel Group is 1.33 times less risky than National Atomic. It trades about 0.03 of its potential returns per unit of risk. National Atomic Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,339 in National Atomic Co on September 12, 2024 and sell it today you would earn a total of 1,596 from holding National Atomic Co or generate 68.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. National Atomic Co
Performance |
| Timeline |
| PPHE Hotel Group |
| National Atomic |
PPHE Hotel and National Atomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and National Atomic
The main advantage of trading using opposite PPHE Hotel and National Atomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, National Atomic 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 National Atomic will offset losses from the drop in National Atomic's long position.| PPHE Hotel vs. National Atomic Co | PPHE Hotel vs. OTP Bank Nyrt | PPHE Hotel vs. Samsung Electronics Co | PPHE Hotel vs. Samsung Electronics Co |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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