Correlation Between Quality Hospitality and Quality Houses
Can any of the company-specific risk be diversified away by investing in both Quality Hospitality and Quality Houses 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 Hospitality and Quality Houses into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quality Hospitality Leasehold and Quality Houses Hotel, you can compare the effects of market volatilities on Quality Hospitality and Quality Houses 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 Hospitality with a short position of Quality Houses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quality Hospitality and Quality Houses.
Diversification Opportunities for Quality Hospitality and Quality Houses
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Quality and Quality is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Quality Hospitality Leasehold and Quality Houses Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quality Houses Hotel and Quality Hospitality 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 Hospitality Leasehold are associated (or correlated) with Quality Houses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quality Houses Hotel has no effect on the direction of Quality Hospitality i.e., Quality Hospitality and Quality Houses go up and down completely randomly.
Pair Corralation between Quality Hospitality and Quality Houses
Assuming the 90 days trading horizon Quality Hospitality Leasehold is expected to generate 0.99 times more return on investment than Quality Houses. However, Quality Hospitality Leasehold is 1.01 times less risky than Quality Houses. It trades about 0.06 of its potential returns per unit of risk. Quality Houses Hotel is currently generating about 0.05 per unit of risk. If you would invest 270.00 in Quality Hospitality Leasehold on September 14, 2024 and sell it today you would earn a total of 88.00 from holding Quality Hospitality Leasehold or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quality Hospitality Leasehold vs. Quality Houses Hotel
Performance |
| Timeline |
| Quality Hospitality |
| Quality Houses Hotel |
Quality Hospitality and Quality Houses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quality Hospitality and Quality Houses
The main advantage of trading using opposite Quality Hospitality and Quality Houses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quality Hospitality position performs unexpectedly, Quality Houses 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 Houses will offset losses from the drop in Quality Houses' long position.| Quality Hospitality vs. Quality Houses Hotel | Quality Hospitality vs. Quality Houses Property | Quality Hospitality vs. HEMARAJ INDUSTRIAL PROPERTY |
| Quality Houses vs. Quality Houses Property | Quality Houses vs. Land and Houses | Quality Houses vs. WHA Premium Growth | Quality Houses vs. LH Hotel Leasehold |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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