Correlation Between One Group and Brooge Holdings
Can any of the company-specific risk be diversified away by investing in both One Group and Brooge Holdings 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 One Group and Brooge Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Group Hospitality and Brooge Holdings, you can compare the effects of market volatilities on One Group and Brooge Holdings 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 One Group with a short position of Brooge Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Group and Brooge Holdings.
Diversification Opportunities for One Group and Brooge Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between One and Brooge is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding One Group Hospitality and Brooge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Holdings and One Group 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 One Group Hospitality are associated (or correlated) with Brooge Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Holdings has no effect on the direction of One Group i.e., One Group and Brooge Holdings go up and down completely randomly.
Pair Corralation between One Group and Brooge Holdings
Given the investment horizon of 90 days One Group Hospitality is expected to under-perform the Brooge Holdings. But the stock apears to be less risky and, when comparing its historical volatility, One Group Hospitality is 2.17 times less risky than Brooge Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The Brooge Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Brooge Holdings on September 14, 2024 and sell it today you would earn a total of 41.00 from holding Brooge Holdings or generate 29.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Group Hospitality vs. Brooge Holdings
Performance |
| Timeline |
| One Group Hospitality |
| Brooge Holdings |
One Group and Brooge Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Group and Brooge Holdings
The main advantage of trading using opposite One Group and Brooge Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Group position performs unexpectedly, Brooge Holdings 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 Brooge Holdings will offset losses from the drop in Brooge Holdings' long position.The idea behind One Group Hospitality and Brooge Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Brooge Holdings vs. Teekay | Brooge Holdings vs. Targa Resources | Brooge Holdings vs. Teekay Tankers | Brooge Holdings vs. Dynagas LNG Partners |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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