Correlation Between Millenium Hotels and Catenon SA
Can any of the company-specific risk be diversified away by investing in both Millenium Hotels and Catenon SA 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 Millenium Hotels and Catenon SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Millenium Hotels Real and Catenon SA, you can compare the effects of market volatilities on Millenium Hotels and Catenon SA 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 Millenium Hotels with a short position of Catenon SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Millenium Hotels and Catenon SA.
Diversification Opportunities for Millenium Hotels and Catenon SA
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Millenium and Catenon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Millenium Hotels Real and Catenon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catenon SA and Millenium Hotels 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 Millenium Hotels Real are associated (or correlated) with Catenon SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catenon SA has no effect on the direction of Millenium Hotels i.e., Millenium Hotels and Catenon SA go up and down completely randomly.
Pair Corralation between Millenium Hotels and Catenon SA
Assuming the 90 days trading horizon Millenium Hotels Real is expected to generate 0.5 times more return on investment than Catenon SA. However, Millenium Hotels Real is 2.0 times less risky than Catenon SA. It trades about -0.18 of its potential returns per unit of risk. Catenon SA is currently generating about -0.16 per unit of risk. If you would invest 270.00 in Millenium Hotels Real on October 23, 2024 and sell it today you would lose (10.00) from holding Millenium Hotels Real or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Millenium Hotels Real vs. Catenon SA
Performance |
| Timeline |
| Millenium Hotels Real |
| Catenon SA |
Millenium Hotels and Catenon SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Millenium Hotels and Catenon SA
The main advantage of trading using opposite Millenium Hotels and Catenon SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Millenium Hotels position performs unexpectedly, Catenon SA 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 Catenon SA will offset losses from the drop in Catenon SA's long position.| Millenium Hotels vs. Airbus Group SE | Millenium Hotels vs. Industria de Diseno | Millenium Hotels vs. Vale SA | Millenium Hotels vs. Iberdrola SA |
| Catenon SA vs. Millenium Hotels Real | Catenon SA vs. Naturhouse Health SA | Catenon SA vs. Atrys Health SL | Catenon SA vs. Techo Hogar SOCIMI, |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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