Correlation Between American Healthcare and Dalata Hotel

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

By analyzing existing cross correlation between American Healthcare REIT, and Dalata Hotel Group, you can compare the effects of market volatilities on American Healthcare 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 American Healthcare with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Dalata Hotel.

Diversification Opportunities for American Healthcare and Dalata Hotel

0.0

Correlation Coefficient

American Healthcare  Dalata Hotel

Pay attention - limited upside

The 3 months correlation between American and Dalata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and American Healthcare 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 American Healthcare REIT, 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 Group has no effect on the direction of American Healthcare i.e., American Healthcare and Dalata Hotel go up and down completely randomly.

Pair Corralation between American Healthcare and Dalata Hotel

Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 0.79 times more return on investment than Dalata Hotel. However, American Healthcare REIT, is 1.26 times less risky than Dalata Hotel. It trades about 0.22 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.04 per unit of risk. If you would invest  1,265  in American Healthcare REIT, on September 20, 2024 and sell it today you would earn a total of  1,473  from holding American Healthcare REIT, or generate 116.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	44.24%
Values	Daily Returns

American Healthcare REIT,  vs.  Dalata Hotel Group

American Healthcare REIT,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical indicators, American Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dalata Hotel Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dalata Hotel Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dalata Hotel is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with American Healthcare and Dalata Hotel

The main advantage of trading using opposite American Healthcare and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare 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 American Healthcare REIT, and Dalata Hotel 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.