Correlation Between Hotel Holiday and Easywell Biomedicals
Can any of the company-specific risk be diversified away by investing in both Hotel Holiday and Easywell Biomedicals 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 Hotel Holiday and Easywell Biomedicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Holiday Garden and Easywell Biomedicals, you can compare the effects of market volatilities on Hotel Holiday and Easywell Biomedicals 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 Hotel Holiday with a short position of Easywell Biomedicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Holiday and Easywell Biomedicals.
Diversification Opportunities for Hotel Holiday and Easywell Biomedicals
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hotel and Easywell is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Holiday Garden and Easywell Biomedicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easywell Biomedicals and Hotel Holiday 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 Hotel Holiday Garden are associated (or correlated) with Easywell Biomedicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easywell Biomedicals has no effect on the direction of Hotel Holiday i.e., Hotel Holiday and Easywell Biomedicals go up and down completely randomly.
Pair Corralation between Hotel Holiday and Easywell Biomedicals
Assuming the 90 days trading horizon Hotel Holiday Garden is expected to generate 0.28 times more return on investment than Easywell Biomedicals. However, Hotel Holiday Garden is 3.54 times less risky than Easywell Biomedicals. It trades about -0.04 of its potential returns per unit of risk. Easywell Biomedicals is currently generating about -0.15 per unit of risk. If you would invest 1,770 in Hotel Holiday Garden on October 25, 2024 and sell it today you would lose (60.00) from holding Hotel Holiday Garden or give up 3.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hotel Holiday Garden vs. Easywell Biomedicals
Performance |
Timeline |
Hotel Holiday Garden |
Easywell Biomedicals |
Hotel Holiday and Easywell Biomedicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hotel Holiday and Easywell Biomedicals
The main advantage of trading using opposite Hotel Holiday and Easywell Biomedicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Holiday position performs unexpectedly, Easywell Biomedicals 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 Easywell Biomedicals will offset losses from the drop in Easywell Biomedicals' long position.Hotel Holiday vs. Tong Yang Industry | Hotel Holiday vs. Ta Yih Industrial | Hotel Holiday vs. Basso Industry Corp | Hotel Holiday vs. China Motor Corp |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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