Correlation Between High Performance and American Hotel
Can any of the company-specific risk be diversified away by investing in both High Performance and American Hotel 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 High Performance and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Performance Beverages and American Hotel Income, you can compare the effects of market volatilities on High Performance and American Hotel 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 High Performance with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Performance and American Hotel.
Diversification Opportunities for High Performance and American Hotel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between High and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Performance Beverages and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and High Performance 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 High Performance Beverages are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of High Performance i.e., High Performance and American Hotel go up and down completely randomly.
Pair Corralation between High Performance and American Hotel
Given the investment horizon of 90 days High Performance Beverages is expected to generate 66.65 times more return on investment than American Hotel. However, High Performance is 66.65 times more volatile than American Hotel Income. It trades about 0.35 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.04 per unit of risk. If you would invest 0.00 in High Performance Beverages on September 13, 2024 and sell it today you would earn a total of 0.00 from holding High Performance Beverages or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.17% |
| Values | Daily Returns |
High Performance Beverages vs. American Hotel Income
Performance |
| Timeline |
| High Performance Bev |
| American Hotel Income |
High Performance and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Performance and American Hotel
The main advantage of trading using opposite High Performance and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Performance position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| High Performance vs. V Group | High Performance vs. Fbec Worldwide | High Performance vs. Hiru Corporation | High Performance vs. Alkame Holdings |
| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Braemar Hotels Resorts | American Hotel vs. Braemar Hotels Resorts |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Correlations Find global opportunities by holding instruments from different markets |