Correlation Between PPHE Hotel and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and Plaza Centers 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 Plaza Centers 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 Plaza Centers NV, you can compare the effects of market volatilities on PPHE Hotel and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Plaza Centers.
Diversification Opportunities for PPHE Hotel and Plaza Centers
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between PPHE and Plaza is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and Plaza Centers go up and down completely randomly.
Pair Corralation between PPHE Hotel and Plaza Centers
Assuming the 90 days trading horizon PPHE Hotel Group is expected to generate 0.42 times more return on investment than Plaza Centers. However, PPHE Hotel Group is 2.39 times less risky than Plaza Centers. It trades about -0.07 of its potential returns per unit of risk. Plaza Centers NV is currently generating about -0.15 per unit of risk. If you would invest 133,672 in PPHE Hotel Group on September 1, 2024 and sell it today you would lose (16,172) from holding PPHE Hotel Group or give up 12.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE Hotel Group vs. Plaza Centers NV
Performance |
| Timeline |
| PPHE Hotel Group |
| Plaza Centers NV |
PPHE Hotel and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Plaza Centers
The main advantage of trading using opposite PPHE Hotel and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| PPHE Hotel vs. AMG Advanced Metallurgical | PPHE Hotel vs. GreenX Metals | PPHE Hotel vs. Thor Mining PLC | PPHE Hotel vs. Silvercorp Metals |
| Plaza Centers vs. Impax Environmental Markets | Plaza Centers vs. Naked Wines plc | Plaza Centers vs. Beeks Trading | Plaza Centers vs. Lowland Investment Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |