Correlation Between Hispanotels Inversiones and Grupo Catalana
Can any of the company-specific risk be diversified away by investing in both Hispanotels Inversiones and Grupo Catalana 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 Hispanotels Inversiones and Grupo Catalana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hispanotels Inversiones SOCIMI and Grupo Catalana Occidente, you can compare the effects of market volatilities on Hispanotels Inversiones and Grupo Catalana 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 Hispanotels Inversiones with a short position of Grupo Catalana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hispanotels Inversiones and Grupo Catalana.
Diversification Opportunities for Hispanotels Inversiones and Grupo Catalana
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hispanotels and Grupo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hispanotels Inversiones SOCIMI and Grupo Catalana Occidente in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Catalana Occidente and Hispanotels Inversiones 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 Hispanotels Inversiones SOCIMI are associated (or correlated) with Grupo Catalana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Catalana Occidente has no effect on the direction of Hispanotels Inversiones i.e., Hispanotels Inversiones and Grupo Catalana go up and down completely randomly.
Pair Corralation between Hispanotels Inversiones and Grupo Catalana
Assuming the 90 days trading horizon Hispanotels Inversiones SOCIMI is expected to generate 0.51 times more return on investment than Grupo Catalana. However, Hispanotels Inversiones SOCIMI is 1.97 times less risky than Grupo Catalana. It trades about 0.49 of its potential returns per unit of risk. Grupo Catalana Occidente is currently generating about 0.18 per unit of risk. If you would invest 715.00 in Hispanotels Inversiones SOCIMI on November 28, 2024 and sell it today you would earn a total of 30.00 from holding Hispanotels Inversiones SOCIMI or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hispanotels Inversiones SOCIMI vs. Grupo Catalana Occidente
Performance |
| Timeline |
| Hispanotels Inversiones |
| Grupo Catalana Occidente |
Hispanotels Inversiones and Grupo Catalana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hispanotels Inversiones and Grupo Catalana
The main advantage of trading using opposite Hispanotels Inversiones and Grupo Catalana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hispanotels Inversiones position performs unexpectedly, Grupo Catalana 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 Catalana will offset losses from the drop in Grupo Catalana's long position.| Hispanotels Inversiones vs. Techo Hogar SOCIMI, | Hispanotels Inversiones vs. Inhome Prime Properties | Hispanotels Inversiones vs. Aedas Homes SL | Hispanotels Inversiones vs. Azaria Rental SOCIMI |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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