Correlation Between CARSALES and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both CARSALES and NH 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 CARSALES and NH HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and NH HOTEL GROUP, you can compare the effects of market volatilities on CARSALES and NH 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 CARSALES with a short position of NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALES and NH HOTEL.
Diversification Opportunities for CARSALES and NH HOTEL
Excellent diversification
The 3 months correlation between CARSALES and NH5 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP and CARSALES 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 CARSALESCOM are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of CARSALES i.e., CARSALES and NH HOTEL go up and down completely randomly.
Pair Corralation between CARSALES and NH HOTEL
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 2.2 times more return on investment than NH HOTEL. However, CARSALES is 2.2 times more volatile than NH HOTEL GROUP. It trades about 0.27 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.02 per unit of risk. If you would invest 2,220 in CARSALESCOM on November 6, 2024 and sell it today you would earn a total of 220.00 from holding CARSALESCOM or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CARSALESCOM vs. NH HOTEL GROUP
Performance |
| Timeline |
| CARSALESCOM |
| NH HOTEL GROUP |
CARSALES and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALES and NH HOTEL
The main advantage of trading using opposite CARSALES and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALES position performs unexpectedly, NH 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| CARSALES vs. EPSILON HEALTHCARE LTD | CARSALES vs. CEOTRONICS | CARSALES vs. Materialise NV | CARSALES vs. CARDINAL HEALTH |
| NH HOTEL vs. MOLSON RS BEVERAGE | NH HOTEL vs. MCEWEN MINING INC | NH HOTEL vs. STGEORGE MINING LTD | NH HOTEL vs. Tsingtao Brewery |
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.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |