Correlation Between ProShares Trust and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Grupo Hotelero 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 ProShares Trust and Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Grupo Hotelero Santa, you can compare the effects of market volatilities on ProShares Trust and Grupo Hotelero 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 ProShares Trust with a short position of Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Grupo Hotelero.
Diversification Opportunities for ProShares Trust and Grupo Hotelero
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProShares and Grupo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa and ProShares Trust 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 ProShares Trust are associated (or correlated) with Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of ProShares Trust i.e., ProShares Trust and Grupo Hotelero go up and down completely randomly.
Pair Corralation between ProShares Trust and Grupo Hotelero
Assuming the 90 days trading horizon ProShares Trust is expected to under-perform the Grupo Hotelero. In addition to that, ProShares Trust is 2.32 times more volatile than Grupo Hotelero Santa. It trades about -0.05 of its total potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.18 per unit of volatility. If you would invest 388.00 in Grupo Hotelero Santa on September 2, 2024 and sell it today you would earn a total of 12.00 from holding Grupo Hotelero Santa or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
ProShares Trust vs. Grupo Hotelero Santa
Performance |
| Timeline |
| ProShares Trust |
| Grupo Hotelero Santa |
ProShares Trust and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Grupo Hotelero
The main advantage of trading using opposite ProShares Trust and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.| ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust | ProShares Trust vs. ProShares Trust |
| Grupo Hotelero vs. Capital One Financial | Grupo Hotelero vs. Lloyds Banking Group | Grupo Hotelero vs. McEwen Mining | Grupo Hotelero vs. Verizon Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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