Correlation Between Samhi Hotels and GTL
Can any of the company-specific risk be diversified away by investing in both Samhi Hotels and GTL 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 Samhi Hotels and GTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhi Hotels Limited and GTL Limited, you can compare the effects of market volatilities on Samhi Hotels and GTL 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 Samhi Hotels with a short position of GTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhi Hotels and GTL.
Diversification Opportunities for Samhi Hotels and GTL
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samhi and GTL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samhi Hotels Limited and GTL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GTL Limited and Samhi Hotels 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 Samhi Hotels Limited are associated (or correlated) with GTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GTL Limited has no effect on the direction of Samhi Hotels i.e., Samhi Hotels and GTL go up and down completely randomly.
Pair Corralation between Samhi Hotels and GTL
Assuming the 90 days trading horizon Samhi Hotels Limited is expected to generate 0.76 times more return on investment than GTL. However, Samhi Hotels Limited is 1.31 times less risky than GTL. It trades about 0.09 of its potential returns per unit of risk. GTL Limited is currently generating about 0.04 per unit of risk. If you would invest 18,292 in Samhi Hotels Limited on September 5, 2024 and sell it today you would earn a total of 711.00 from holding Samhi Hotels Limited or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhi Hotels Limited vs. GTL Limited
Performance |
| Timeline |
| Samhi Hotels Limited |
| GTL Limited |
Samhi Hotels and GTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhi Hotels and GTL
The main advantage of trading using opposite Samhi Hotels and GTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhi Hotels position performs unexpectedly, GTL 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 GTL will offset losses from the drop in GTL's long position.| Samhi Hotels vs. Reliance Industries Limited | Samhi Hotels vs. State Bank of | Samhi Hotels vs. HDFC Bank Limited | Samhi Hotels vs. Oil Natural Gas |
| GTL vs. Kingfa Science Technology | GTL vs. Rico Auto Industries | GTL vs. GACM Technologies Limited | GTL vs. COSMO FIRST LIMITED |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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