Correlation Between Selina Hospitality and NetSol Technologies
Can any of the company-specific risk be diversified away by investing in both Selina Hospitality and NetSol Technologies 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 Selina Hospitality and NetSol Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selina Hospitality PLC and NetSol Technologies, you can compare the effects of market volatilities on Selina Hospitality and NetSol Technologies 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 Selina Hospitality with a short position of NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selina Hospitality and NetSol Technologies.
Diversification Opportunities for Selina Hospitality and NetSol Technologies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Selina and NetSol is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Selina Hospitality PLC and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies and Selina Hospitality 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 Selina Hospitality PLC are associated (or correlated) with NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Selina Hospitality i.e., Selina Hospitality and NetSol Technologies go up and down completely randomly.
Pair Corralation between Selina Hospitality and NetSol Technologies
Assuming the 90 days horizon Selina Hospitality PLC is expected to generate 21.97 times more return on investment than NetSol Technologies. However, Selina Hospitality is 21.97 times more volatile than NetSol Technologies. It trades about 0.13 of its potential returns per unit of risk. NetSol Technologies is currently generating about 0.04 per unit of risk. If you would invest 1.27 in Selina Hospitality PLC on September 4, 2024 and sell it today you would lose (0.27) from holding Selina Hospitality PLC or give up 21.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.43% |
| Values | Daily Returns |
Selina Hospitality PLC vs. NetSol Technologies
Performance |
| Timeline |
| Selina Hospitality PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NetSol Technologies |
Selina Hospitality and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selina Hospitality and NetSol Technologies
The main advantage of trading using opposite Selina Hospitality and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selina Hospitality position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.| Selina Hospitality vs. Constellation Brands Class | Selina Hospitality vs. CF Industries Holdings | Selina Hospitality vs. Molson Coors Brewing | Selina Hospitality vs. Sealed Air |
| NetSol Technologies vs. MIND CTI | NetSol Technologies vs. PDF Solutions | NetSol Technologies vs. Research Solutions | NetSol Technologies vs. Red Violet |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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