Correlation Between REGAL HOTEL and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL and COVIVIO HOTELS 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 REGAL HOTEL and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL HOTEL INTL and COVIVIO HOTELS INH, you can compare the effects of market volatilities on REGAL HOTEL and COVIVIO HOTELS 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 REGAL HOTEL with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and COVIVIO HOTELS.
Diversification Opportunities for REGAL HOTEL and COVIVIO HOTELS
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between REGAL and COVIVIO is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH and REGAL 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 REGAL HOTEL INTL are associated (or correlated) with COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between REGAL HOTEL and COVIVIO HOTELS
Assuming the 90 days trading horizon REGAL HOTEL is expected to generate 3.22 times less return on investment than COVIVIO HOTELS. In addition to that, REGAL HOTEL is 1.31 times more volatile than COVIVIO HOTELS INH. It trades about 0.08 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.34 per unit of volatility. If you would invest 1,815 in COVIVIO HOTELS INH on October 10, 2024 and sell it today you would earn a total of 255.00 from holding COVIVIO HOTELS INH or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| REGAL HOTEL INTL |
| COVIVIO HOTELS INH |
REGAL HOTEL and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and COVIVIO HOTELS
The main advantage of trading using opposite REGAL HOTEL and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| REGAL HOTEL vs. Insteel Industries | REGAL HOTEL vs. Constellation Software | REGAL HOTEL vs. Unity Software | REGAL HOTEL vs. Magic Software Enterprises |
| COVIVIO HOTELS vs. SEALED AIR | COVIVIO HOTELS vs. Forsys Metals Corp | COVIVIO HOTELS vs. ALTAIR RES INC | COVIVIO HOTELS vs. Wizz Air Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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