Correlation Between Squirrel Media and NH Hoteles
Can any of the company-specific risk be diversified away by investing in both Squirrel Media 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 Squirrel Media and NH Hoteles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Squirrel Media SA and NH Hoteles, you can compare the effects of market volatilities on Squirrel Media 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 Squirrel Media with a short position of NH Hoteles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Squirrel Media and NH Hoteles.
Diversification Opportunities for Squirrel Media and NH Hoteles
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Squirrel and NHH is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Squirrel Media SA and NH Hoteles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Hoteles and Squirrel Media 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 Squirrel Media 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 Squirrel Media i.e., Squirrel Media and NH Hoteles go up and down completely randomly.
Pair Corralation between Squirrel Media and NH Hoteles
Assuming the 90 days trading horizon Squirrel Media is expected to generate 6.17 times less return on investment than NH Hoteles. But when comparing it to its historical volatility, Squirrel Media SA is 2.23 times less risky than NH Hoteles. It trades about 0.07 of its potential returns per unit of risk. NH Hoteles is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 427.00 in NH Hoteles on October 25, 2024 and sell it today you would earn a total of 202.00 from holding NH Hoteles or generate 47.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Squirrel Media SA vs. NH Hoteles
Performance |
| Timeline |
| Squirrel Media SA |
| NH Hoteles |
Squirrel Media and NH Hoteles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Squirrel Media and NH Hoteles
The main advantage of trading using opposite Squirrel Media and NH Hoteles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Squirrel Media 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.| Squirrel Media vs. NH Hoteles | Squirrel Media vs. Ebro Foods | Squirrel Media vs. Millenium Hotels Real | Squirrel Media vs. International Consolidated Airlines |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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