Correlation Between REGAL HOTEL and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL and MIRAMAR 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 REGAL HOTEL and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV, you can compare the effects of market volatilities on REGAL HOTEL and MIRAMAR 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 REGAL HOTEL with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and MIRAMAR HOTEL.
Diversification Opportunities for REGAL HOTEL and MIRAMAR HOTEL
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between REGAL and MIRAMAR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between REGAL HOTEL and MIRAMAR HOTEL
Assuming the 90 days trading horizon REGAL HOTEL is expected to generate 7.95 times less return on investment than MIRAMAR HOTEL. But when comparing it to its historical volatility, REGAL HOTEL INTL is 1.09 times less risky than MIRAMAR HOTEL. It trades about 0.01 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 53.00 in MIRAMAR HOTEL INV on August 27, 2024 and sell it today you would earn a total of 60.00 from holding MIRAMAR HOTEL INV or generate 113.21% 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. MIRAMAR HOTEL INV
Performance |
| Timeline |
| REGAL HOTEL INTL |
| MIRAMAR HOTEL INV |
REGAL HOTEL and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and MIRAMAR HOTEL
The main advantage of trading using opposite REGAL HOTEL and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL position performs unexpectedly, MIRAMAR 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Microsoft |
| MIRAMAR HOTEL vs. Sinopec Shanghai Petrochemical | MIRAMAR HOTEL vs. QURATE RETAIL INC | MIRAMAR HOTEL vs. PICKN PAY STORES | MIRAMAR HOTEL vs. NISSAN CHEMICAL IND |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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