Correlation Between Adris Grupa and Arena Hospitality

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

By analyzing existing cross correlation between Adris Grupa dd and Arena Hospitality Group, you can compare the effects of market volatilities on Adris Grupa and Arena Hospitality 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 Adris Grupa with a short position of Arena Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adris Grupa and Arena Hospitality.

Diversification Opportunities for Adris Grupa and Arena Hospitality

0.61

Correlation Coefficient

Adris Grupa  Arena Hospitality

Poor diversification

The 3 months correlation between Adris and Arena is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Adris Grupa dd and Arena Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Hospitality and Adris Grupa 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 Adris Grupa dd are associated (or correlated) with Arena Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Hospitality has no effect on the direction of Adris Grupa i.e., Adris Grupa and Arena Hospitality go up and down completely randomly.

Pair Corralation between Adris Grupa and Arena Hospitality

Assuming the 90 days trading horizon Adris Grupa dd is expected to generate 1.43 times more return on investment than Arena Hospitality. However, Adris Grupa is 1.43 times more volatile than Arena Hospitality Group. It trades about -0.02 of its potential returns per unit of risk. Arena Hospitality Group is currently generating about -0.12 per unit of risk. If you would invest  8,150  in Adris Grupa dd on September 3, 2024 and sell it today you would lose (150.00) from holding Adris Grupa dd or give up 1.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	86.54%
Values	Daily Returns

Adris Grupa dd  vs.  Arena Hospitality Group

Adris Grupa dd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adris Grupa dd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Adris Grupa is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Arena Hospitality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arena Hospitality Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Adris Grupa and Arena Hospitality

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

The idea behind Adris Grupa dd and Arena Hospitality 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.