Correlation Between Q2M Managementberatu and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu and NH HOTEL 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 Q2M Managementberatu and NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Q2M Managementberatung AG and NH HOTEL GROUP, you can compare the effects of market volatilities on Q2M Managementberatu and NH HOTEL 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 Q2M Managementberatu with a short position of NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and NH HOTEL.
Diversification Opportunities for Q2M Managementberatu and NH HOTEL
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Q2M and NH5 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP and Q2M Managementberatu 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 Q2M Managementberatung AG are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Q2M Managementberatu i.e., Q2M Managementberatu and NH HOTEL go up and down completely randomly.
Pair Corralation between Q2M Managementberatu and NH HOTEL
Assuming the 90 days trading horizon Q2M Managementberatu is expected to generate 725.0 times less return on investment than NH HOTEL. But when comparing it to its historical volatility, Q2M Managementberatung AG is 23.82 times less risky than NH HOTEL. It trades about 0.0 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 390.00 in NH HOTEL GROUP on September 3, 2024 and sell it today you would earn a total of 21.00 from holding NH HOTEL GROUP or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Q2M Managementberatung AG vs. NH HOTEL GROUP
Performance |
| Timeline |
| Q2M Managementberatung |
| NH HOTEL GROUP |
Q2M Managementberatu and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Q2M Managementberatu and NH HOTEL
The main advantage of trading using opposite Q2M Managementberatu and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Q2M Managementberatu vs. Perseus Mining Limited | Q2M Managementberatu vs. The Boston Beer | Q2M Managementberatu vs. MOLSON RS BEVERAGE | Q2M Managementberatu vs. National 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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