Correlation Between REGAL HOTEL and EBIQUITY
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL and EBIQUITY 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 EBIQUITY 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 EBIQUITY, you can compare the effects of market volatilities on REGAL HOTEL and EBIQUITY 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 EBIQUITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and EBIQUITY.
Diversification Opportunities for REGAL HOTEL and EBIQUITY
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between REGAL and EBIQUITY is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and EBIQUITY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBIQUITY 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 EBIQUITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBIQUITY has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and EBIQUITY go up and down completely randomly.
Pair Corralation between REGAL HOTEL and EBIQUITY
Assuming the 90 days trading horizon REGAL HOTEL INTL is expected to generate 1.0 times more return on investment than EBIQUITY. However, REGAL HOTEL INTL is 1.0 times less risky than EBIQUITY. It trades about 0.01 of its potential returns per unit of risk. EBIQUITY is currently generating about -0.04 per unit of risk. If you would invest 30.00 in REGAL HOTEL INTL on August 27, 2024 and sell it today you would lose (1.00) from holding REGAL HOTEL INTL or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. EBIQUITY
Performance |
| Timeline |
| REGAL HOTEL INTL |
| EBIQUITY |
REGAL HOTEL and EBIQUITY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and EBIQUITY
The main advantage of trading using opposite REGAL HOTEL and EBIQUITY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL position performs unexpectedly, EBIQUITY 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 EBIQUITY will offset losses from the drop in EBIQUITY's long position.| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Microsoft |
| EBIQUITY vs. REGAL HOTEL INTL | EBIQUITY vs. KIMBALL ELECTRONICS | EBIQUITY vs. Electronic Arts | EBIQUITY vs. NH HOTEL GROUP |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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