Correlation Between TRAVEL + and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both TRAVEL + and PPHE 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 TRAVEL + and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and PPHE HOTEL GROUP, you can compare the effects of market volatilities on TRAVEL + and PPHE 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 TRAVEL + with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and PPHE HOTEL.
Diversification Opportunities for TRAVEL + and PPHE HOTEL
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRAVEL and PPHE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and TRAVEL + 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 TRAVEL LEISURE DL 01 are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of TRAVEL + i.e., TRAVEL + and PPHE HOTEL go up and down completely randomly.
Pair Corralation between TRAVEL + and PPHE HOTEL
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 0.77 times more return on investment than PPHE HOTEL. However, TRAVEL LEISURE DL 01 is 1.29 times less risky than PPHE HOTEL. It trades about 0.17 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.04 per unit of risk. If you would invest 4,575 in TRAVEL LEISURE DL 01 on November 6, 2024 and sell it today you would earn a total of 725.00 from holding TRAVEL LEISURE DL 01 or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| PPHE HOTEL GROUP |
TRAVEL + and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL + and PPHE HOTEL
The main advantage of trading using opposite TRAVEL + and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + position performs unexpectedly, PPHE 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| TRAVEL + vs. Nomad Foods | TRAVEL + vs. United Rentals | TRAVEL + vs. SENECA FOODS A | TRAVEL + vs. ALBIS LEASING AG |
| PPHE HOTEL vs. ATRESMEDIA | PPHE HOTEL vs. GigaMedia | PPHE HOTEL vs. ANTA SPORTS PRODUCT | PPHE HOTEL vs. Universal Entertainment |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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