Correlation Between Select Sector and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Select Sector 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 Select Sector and Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Select Sector and Grupo Hotelero Santa, you can compare the effects of market volatilities on Select Sector 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 Select Sector with a short position of Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Sector and Grupo Hotelero.
Diversification Opportunities for Select Sector and Grupo Hotelero
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Select and Grupo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Select Sector 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 Select Sector 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 The Select Sector 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 Select Sector i.e., Select Sector and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Select Sector and Grupo Hotelero
Assuming the 90 days trading horizon The Select Sector is expected to generate 1.73 times more return on investment than Grupo Hotelero. However, Select Sector is 1.73 times more volatile than Grupo Hotelero Santa. It trades about 0.17 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.0 per unit of risk. If you would invest 159,900 in The Select Sector on August 30, 2024 and sell it today you would earn a total of 10,700 from holding The Select Sector or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
The Select Sector vs. Grupo Hotelero Santa
Performance |
| Timeline |
| Select Sector |
| Grupo Hotelero Santa |
Select Sector and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Sector and Grupo Hotelero
The main advantage of trading using opposite Select Sector and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Sector 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.| Select Sector vs. The Select Sector | Select Sector vs. The Select Sector | Select Sector vs. The Select Sector | Select Sector vs. The Select Sector |
| Grupo Hotelero vs. Samsung Electronics Co | Grupo Hotelero vs. Berkshire Hathaway | Grupo Hotelero vs. Banco Actinver SA | Grupo Hotelero vs. Baidu Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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