Correlation Between PPHE HOTEL and GREEN MINERALS

Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and GREEN MINERALS 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 PPHE HOTEL and GREEN MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PPHE HOTEL GROUP and GREEN MINERALS NK, you can compare the effects of market volatilities on PPHE HOTEL and GREEN MINERALS 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 PPHE HOTEL with a short position of GREEN MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and GREEN MINERALS.

Diversification Opportunities for PPHE HOTEL and GREEN MINERALS

0.03

Correlation Coefficient

PPHE HOTEL  GREEN MINERALS

Significant diversification

The 3 months correlation between PPHE and GREEN is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and GREEN MINERALS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREEN MINERALS NK and PPHE HOTEL 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 PPHE HOTEL GROUP are associated (or correlated) with GREEN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREEN MINERALS NK has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and GREEN MINERALS go up and down completely randomly.

Pair Corralation between PPHE HOTEL and GREEN MINERALS

Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the GREEN MINERALS. But the stock apears to be less risky and, when comparing its historical volatility, PPHE HOTEL GROUP is 5.25 times less risky than GREEN MINERALS. The stock trades about -0.05 of its potential returns per unit of risk. The GREEN MINERALS NK is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  28.00  in GREEN MINERALS NK on December 20, 2024 and sell it today you would lose (4.00) from holding GREEN MINERALS NK or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PPHE HOTEL GROUP  vs.  GREEN MINERALS NK

PPHE HOTEL GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days PPHE HOTEL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PPHE HOTEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

GREEN MINERALS NK

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GREEN MINERALS NK are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GREEN MINERALS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PPHE HOTEL and GREEN MINERALS

The main advantage of trading using opposite PPHE HOTEL and GREEN MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, GREEN MINERALS 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 GREEN MINERALS will offset losses from the drop in GREEN MINERALS's long position.

The idea behind PPHE HOTEL GROUP and GREEN MINERALS NK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.