Correlation Between Vista Oil and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Vista Oil and Grupo Hotelero 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 Vista Oil and Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Oil Gas and Grupo Hotelero Santa, you can compare the effects of market volatilities on Vista Oil and Grupo Hotelero 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 Vista Oil with a short position of Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and Grupo Hotelero.
Diversification Opportunities for Vista Oil and Grupo Hotelero
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vista and Grupo is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa and Vista Oil 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 Vista Oil Gas are associated (or correlated) with Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of Vista Oil i.e., Vista Oil and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Vista Oil and Grupo Hotelero
Assuming the 90 days trading horizon Vista Oil is expected to generate 2.06 times less return on investment than Grupo Hotelero. In addition to that, Vista Oil is 1.12 times more volatile than Grupo Hotelero Santa. It trades about 0.07 of its total potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.16 per unit of volatility. If you would invest 350.00 in Grupo Hotelero Santa on October 14, 2024 and sell it today you would earn a total of 21.00 from holding Grupo Hotelero Santa or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Oil Gas vs. Grupo Hotelero Santa
Performance |
| Timeline |
| Vista Oil Gas |
| Grupo Hotelero Santa |
Vista Oil and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and Grupo Hotelero
The main advantage of trading using opposite Vista Oil and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.| Vista Oil vs. Grupo Hotelero Santa | Vista Oil vs. Micron Technology | Vista Oil vs. McEwen Mining | Vista Oil vs. Grupo Sports World |
| Grupo Hotelero vs. Delta Air Lines | Grupo Hotelero vs. Capital One Financial | Grupo Hotelero vs. Prudential Financial | Grupo Hotelero vs. Hoteles City Express |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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