Correlation Between Shangri La and OHTL Public
Can any of the company-specific risk be diversified away by investing in both Shangri La and OHTL Public 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 Shangri La and OHTL Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shangri La Hotel Public and OHTL Public, you can compare the effects of market volatilities on Shangri La and OHTL Public 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 Shangri La with a short position of OHTL Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shangri La and OHTL Public.
Diversification Opportunities for Shangri La and OHTL Public
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shangri and OHTL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shangri La Hotel Public and OHTL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OHTL Public and Shangri La 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 Shangri La Hotel Public are associated (or correlated) with OHTL Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OHTL Public has no effect on the direction of Shangri La i.e., Shangri La and OHTL Public go up and down completely randomly.
Pair Corralation between Shangri La and OHTL Public
Assuming the 90 days trading horizon Shangri La Hotel Public is expected to generate 1.41 times more return on investment than OHTL Public. However, Shangri La is 1.41 times more volatile than OHTL Public. It trades about 0.11 of its potential returns per unit of risk. OHTL Public is currently generating about 0.08 per unit of risk. If you would invest 4,800 in Shangri La Hotel Public on November 3, 2024 and sell it today you would lose (500.00) from holding Shangri La Hotel Public or give up 10.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shangri La Hotel Public vs. OHTL Public
Performance |
| Timeline |
| Shangri La Hotel |
| OHTL Public |
Shangri La and OHTL Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shangri La and OHTL Public
The main advantage of trading using opposite Shangri La and OHTL Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shangri La position performs unexpectedly, OHTL Public 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 OHTL Public will offset losses from the drop in OHTL Public's long position.| Shangri La vs. Eastern Technical Engineering | Shangri La vs. Peerapat Technology Public | Shangri La vs. 2S Metal Public | Shangri La vs. Simat Technologies Public |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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