Correlation Between Arena Hospitality and Atlantic Grupa

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

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

Diversification Opportunities for Arena Hospitality and Atlantic Grupa

-0.66

Correlation Coefficient

Arena Hospitality  Atlantic Grupa

Excellent diversification

The 3 months correlation between Arena and Atlantic is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Arena Hospitality Group and Atlantic Grupa dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Grupa dd and Arena Hospitality 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 Arena Hospitality Group are associated (or correlated) with Atlantic Grupa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Grupa dd has no effect on the direction of Arena Hospitality i.e., Arena Hospitality and Atlantic Grupa go up and down completely randomly.

Pair Corralation between Arena Hospitality and Atlantic Grupa

Assuming the 90 days trading horizon Arena Hospitality Group is expected to generate 0.95 times more return on investment than Atlantic Grupa. However, Arena Hospitality Group is 1.06 times less risky than Atlantic Grupa. It trades about 0.11 of its potential returns per unit of risk. Atlantic Grupa dd is currently generating about -0.04 per unit of risk. If you would invest  3,180  in Arena Hospitality Group on December 23, 2024 and sell it today you would earn a total of  220.00  from holding Arena Hospitality Group or generate 6.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.09%
Values	Daily Returns

Arena Hospitality Group  vs.  Atlantic Grupa dd

Arena Hospitality

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arena Hospitality Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Arena Hospitality may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Atlantic Grupa dd

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Arena Hospitality and Atlantic Grupa

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

The idea behind Arena Hospitality Group and Atlantic Grupa dd 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.