Correlation Between Bilendi and Hotelim Socit

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

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

Diversification Opportunities for Bilendi and Hotelim Socit

-0.33

Correlation Coefficient

Bilendi  Hotelim Socit

Very good diversification

The 3 months correlation between Bilendi and Hotelim is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bilendi and Hotelim Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotelim Socit Anonyme and Bilendi 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 Bilendi are associated (or correlated) with Hotelim Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotelim Socit Anonyme has no effect on the direction of Bilendi i.e., Bilendi and Hotelim Socit go up and down completely randomly.

Pair Corralation between Bilendi and Hotelim Socit

Assuming the 90 days trading horizon Bilendi is expected to generate 2.39 times more return on investment than Hotelim Socit. However, Bilendi is 2.39 times more volatile than Hotelim Socit Anonyme. It trades about 0.26 of its potential returns per unit of risk. Hotelim Socit Anonyme is currently generating about 0.03 per unit of risk. If you would invest  1,345  in Bilendi on December 7, 2024 and sell it today you would earn a total of  675.00  from holding Bilendi or generate 50.19% return on investment over 90 days.

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

Bilendi  vs.  Hotelim Socit Anonyme

Bilendi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bilendi reported solid returns over the last few months and may actually be approaching a breakup point.

Hotelim Socit Anonyme

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hotelim Socit Anonyme are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Hotelim Socit is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bilendi and Hotelim Socit

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

The idea behind Bilendi and Hotelim Socit Anonyme 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.