Correlation Between Quality Houses and Quality Hospitality
Can any of the company-specific risk be diversified away by investing in both Quality Houses and Quality Hospitality 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 Quality Houses and Quality Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Houses Hotel and Quality Hospitality Leasehold, you can compare the effects of market volatilities on Quality Houses and Quality Hospitality 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 Quality Houses with a short position of Quality Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Houses and Quality Hospitality.
Diversification Opportunities for Quality Houses and Quality Hospitality
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Quality and Quality is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Quality Houses Hotel and Quality Hospitality Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Hospitality and Quality Houses 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 Quality Houses Hotel are associated (or correlated) with Quality Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Hospitality has no effect on the direction of Quality Houses i.e., Quality Houses and Quality Hospitality go up and down completely randomly.
Pair Corralation between Quality Houses and Quality Hospitality
Assuming the 90 days trading horizon Quality Houses Hotel is expected to under-perform the Quality Hospitality. In addition to that, Quality Houses is 12.3 times more volatile than Quality Hospitality Leasehold. It trades about -0.22 of its total potential returns per unit of risk. Quality Hospitality Leasehold is currently generating about 0.1 per unit of volatility. If you would invest 346.00 in Quality Hospitality Leasehold on September 15, 2024 and sell it today you would earn a total of 12.00 from holding Quality Hospitality Leasehold or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quality Houses Hotel vs. Quality Hospitality Leasehold
Performance |
| Timeline |
| Quality Houses Hotel |
| Quality Hospitality |
Quality Houses and Quality Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Houses and Quality Hospitality
The main advantage of trading using opposite Quality Houses and Quality Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Houses position performs unexpectedly, Quality Hospitality 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 Quality Hospitality will offset losses from the drop in Quality Hospitality's long position.| Quality Houses vs. Quality Houses Property | Quality Houses vs. Land and Houses | Quality Houses vs. WHA Premium Growth | Quality Houses vs. LH Hotel Leasehold |
| Quality Hospitality vs. Quality Houses Hotel | Quality Hospitality vs. Quality Houses Property | Quality Hospitality vs. HEMARAJ INDUSTRIAL PROPERTY |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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