Correlation Between AUSTEVOLL SEAFOOD and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD and MIRAMAR 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 AUSTEVOLL SEAFOOD and MIRAMAR HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and MIRAMAR HOTEL INV, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD and MIRAMAR 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 AUSTEVOLL SEAFOOD with a short position of MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and MIRAMAR HOTEL.
Diversification Opportunities for AUSTEVOLL SEAFOOD and MIRAMAR HOTEL
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUSTEVOLL and MIRAMAR is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD are associated (or correlated) with MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between AUSTEVOLL SEAFOOD and MIRAMAR HOTEL
Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 2.82 times more return on investment than MIRAMAR HOTEL. However, AUSTEVOLL SEAFOOD is 2.82 times more volatile than MIRAMAR HOTEL INV. It trades about 0.13 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.07 per unit of risk. If you would invest 824.00 in AUSTEVOLL SEAFOOD on August 31, 2024 and sell it today you would earn a total of 38.00 from holding AUSTEVOLL SEAFOOD or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AUSTEVOLL SEAFOOD vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| AUSTEVOLL SEAFOOD |
| MIRAMAR HOTEL INV |
AUSTEVOLL SEAFOOD and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSTEVOLL SEAFOOD and MIRAMAR HOTEL
The main advantage of trading using opposite AUSTEVOLL SEAFOOD and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD position performs unexpectedly, MIRAMAR 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| AUSTEVOLL SEAFOOD vs. SIVERS SEMICONDUCTORS AB | AUSTEVOLL SEAFOOD vs. Darden Restaurants | AUSTEVOLL SEAFOOD vs. Reliance Steel Aluminum | AUSTEVOLL SEAFOOD vs. Q2M Managementberatung AG |
| MIRAMAR HOTEL vs. Lion One Metals | MIRAMAR HOTEL vs. LION ONE METALS | MIRAMAR HOTEL vs. UNIVMUSIC GRPADR050 | MIRAMAR HOTEL vs. Direct Line Insurance |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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