Correlation Between AXMIN and DALATA HOTEL

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

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

Diversification Opportunities for AXMIN and DALATA HOTEL

0.0

Correlation Coefficient

AXMIN  DALATA HOTEL

Pay attention - limited upside

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

Pair Corralation between AXMIN and DALATA HOTEL

Assuming the 90 days trading horizon AXMIN is expected to generate 1.08 times less return on investment than DALATA HOTEL. In addition to that, AXMIN is 2.15 times more volatile than DALATA HOTEL. It trades about 0.01 of its total potential returns per unit of risk. DALATA HOTEL is currently generating about 0.03 per unit of volatility. If you would invest  341.00  in DALATA HOTEL on October 13, 2024 and sell it today you would earn a total of  89.00  from holding DALATA HOTEL or generate 26.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

AXMIN Inc  vs.  DALATA HOTEL

AXMIN Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

DALATA HOTEL

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DALATA HOTEL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, DALATA HOTEL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AXMIN and DALATA HOTEL

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

The idea behind AXMIN Inc and DALATA HOTEL 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.