Correlation Between RTL Group and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both RTL Group 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 RTL Group and MIRAMAR HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTL Group SA and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on RTL Group 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 RTL Group with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and MIRAMAR HOTEL.
Diversification Opportunities for RTL Group and MIRAMAR HOTEL
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RTL and MIRAMAR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA 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 RTL Group 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 RTL Group SA 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 RTL Group i.e., RTL Group and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between RTL Group and MIRAMAR HOTEL
Assuming the 90 days trading horizon RTL Group SA is expected to under-perform the MIRAMAR HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, RTL Group SA is 1.49 times less risky than MIRAMAR HOTEL. The stock trades about -0.04 of its potential returns per unit of risk. The MIRAMAR HOTEL INV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 92.00 in MIRAMAR HOTEL INV on September 12, 2024 and sell it today you would earn a total of 19.00 from holding MIRAMAR HOTEL INV or generate 20.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTL Group SA vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| RTL Group SA |
| MIRAMAR HOTEL INV |
RTL Group and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and MIRAMAR HOTEL
The main advantage of trading using opposite RTL Group and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group 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.| RTL Group vs. Coeur Mining | RTL Group vs. AUSTEVOLL SEAFOOD | RTL Group vs. Lifeway Foods | RTL Group vs. TYSON FOODS A |
| MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc | MIRAMAR HOTEL vs. Apple Inc |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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