Correlation Between Revenga Ingenieros and NH Hoteles
Can any of the company-specific risk be diversified away by investing in both Revenga Ingenieros and NH Hoteles 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 Revenga Ingenieros and NH Hoteles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Revenga Ingenieros SA and NH Hoteles, you can compare the effects of market volatilities on Revenga Ingenieros and NH Hoteles 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 Revenga Ingenieros with a short position of NH Hoteles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revenga Ingenieros and NH Hoteles.
Diversification Opportunities for Revenga Ingenieros and NH Hoteles
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Revenga and NHH is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Revenga Ingenieros SA and NH Hoteles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Hoteles and Revenga Ingenieros 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 Revenga Ingenieros SA are associated (or correlated) with NH Hoteles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Hoteles has no effect on the direction of Revenga Ingenieros i.e., Revenga Ingenieros and NH Hoteles go up and down completely randomly.
Pair Corralation between Revenga Ingenieros and NH Hoteles
Assuming the 90 days trading horizon Revenga Ingenieros SA is expected to generate 9.76 times more return on investment than NH Hoteles. However, Revenga Ingenieros is 9.76 times more volatile than NH Hoteles. It trades about 0.18 of its potential returns per unit of risk. NH Hoteles is currently generating about 0.03 per unit of risk. If you would invest 164.00 in Revenga Ingenieros SA on November 29, 2024 and sell it today you would earn a total of 14.00 from holding Revenga Ingenieros SA or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Revenga Ingenieros SA vs. NH Hoteles
Performance |
| Timeline |
| Revenga Ingenieros |
| NH Hoteles |
Revenga Ingenieros and NH Hoteles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Revenga Ingenieros and NH Hoteles
The main advantage of trading using opposite Revenga Ingenieros and NH Hoteles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Revenga Ingenieros position performs unexpectedly, NH Hoteles 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 NH Hoteles will offset losses from the drop in NH Hoteles' long position.| Revenga Ingenieros vs. Vytrus Biotech SA | Revenga Ingenieros vs. Ebro Foods | Revenga Ingenieros vs. Plasticos Compuestos SA | Revenga Ingenieros vs. Arrienda Rental Properties |
| NH Hoteles vs. Melia Hotels | NH Hoteles vs. Indra A | NH Hoteles vs. Fomento de Construcciones | NH Hoteles vs. Acerinox |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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