Correlation Between PPHE HOTEL and ARDAGH METAL

Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and ARDAGH METAL 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on PPHE HOTEL and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and ARDAGH METAL.

Diversification Opportunities for PPHE HOTEL and ARDAGH METAL

-0.45

Correlation Coefficient

PPHE HOTEL  ARDAGH METAL

Very good diversification

The 3 months correlation between PPHE and ARDAGH is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and ARDAGH METAL go up and down completely randomly.

Pair Corralation between PPHE HOTEL and ARDAGH METAL

Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to generate 0.5 times more return on investment than ARDAGH METAL. However, PPHE HOTEL GROUP is 2.0 times less risky than ARDAGH METAL. It trades about 0.31 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.06 per unit of risk. If you would invest  1,390  in PPHE HOTEL GROUP on September 17, 2024 and sell it today you would earn a total of  180.00  from holding PPHE HOTEL GROUP or generate 12.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PPHE HOTEL GROUP  vs.  ARDAGH METAL PACDL 0001

PPHE HOTEL GROUP

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE HOTEL GROUP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

ARDAGH METAL PACDL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ARDAGH METAL PACDL 0001 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ARDAGH METAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PPHE HOTEL and ARDAGH METAL

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

The idea behind PPHE HOTEL GROUP and ARDAGH METAL PACDL 0001 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.