Correlation Between ACCOR SPADR and H World

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

By analyzing existing cross correlation between ACCOR SPADR NEW and H World Group, you can compare the effects of market volatilities on ACCOR SPADR and H World 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 ACCOR SPADR with a short position of H World. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCOR SPADR and H World.

Diversification Opportunities for ACCOR SPADR and H World

-0.38

Correlation Coefficient

ACCOR SPADR  H World

Very good diversification

The 3 months correlation between ACCOR and CL4A is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ACCOR SPADR NEW and H World Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H World Group and ACCOR SPADR 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 ACCOR SPADR NEW are associated (or correlated) with H World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H World Group has no effect on the direction of ACCOR SPADR i.e., ACCOR SPADR and H World go up and down completely randomly.

Pair Corralation between ACCOR SPADR and H World

Assuming the 90 days trading horizon ACCOR SPADR NEW is expected to generate 0.57 times more return on investment than H World. However, ACCOR SPADR NEW is 1.75 times less risky than H World. It trades about 0.1 of its potential returns per unit of risk. H World Group is currently generating about 0.0 per unit of risk. If you would invest  429.00  in ACCOR SPADR NEW on September 23, 2024 and sell it today you would earn a total of  481.00  from holding ACCOR SPADR NEW or generate 112.12% return on investment over 90 days.

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

ACCOR SPADR NEW  vs.  H World Group

ACCOR SPADR NEW

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ACCOR SPADR NEW are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ACCOR SPADR reported solid returns over the last few months and may actually be approaching a breakup point.

H World Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in H World Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, H World reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACCOR SPADR and H World

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

The idea behind ACCOR SPADR NEW and H World Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.