Correlation Between PPHE HOTEL and Thyssenkrupp

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

Diversification Opportunities for PPHE HOTEL and Thyssenkrupp

0.0

Correlation Coefficient

PPHE HOTEL  Thyssenkrupp

Pay attention - limited upside

The 3 months correlation between PPHE and Thyssenkrupp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Thyssenkrupp go up and down completely randomly.

Pair Corralation between PPHE HOTEL and Thyssenkrupp

If you would invest (100.00) in thyssenkrupp AG on December 22, 2024 and sell it today you would earn a total of  100.00  from holding thyssenkrupp AG or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PPHE HOTEL GROUP  vs.  thyssenkrupp AG

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 latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

thyssenkrupp AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in thyssenkrupp AG are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Thyssenkrupp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PPHE HOTEL and Thyssenkrupp

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

The idea behind PPHE HOTEL GROUP and thyssenkrupp AG 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.