Correlation Between Bank of Queensland and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Hotel Property 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 Bank of Queensland and Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Hotel Property Investments, you can compare the effects of market volatilities on Bank of Queensland and Hotel Property 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 Bank of Queensland with a short position of Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Hotel Property.
Diversification Opportunities for Bank of Queensland and Hotel Property
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Hotel is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves and Bank of Queensland 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 Bank of Queensland are associated (or correlated) with Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Hotel Property go up and down completely randomly.
Pair Corralation between Bank of Queensland and Hotel Property
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 40.68 times less return on investment than Hotel Property. But when comparing it to its historical volatility, Bank of Queensland is 2.82 times less risky than Hotel Property. It trades about 0.01 of its potential returns per unit of risk. Hotel Property Investments is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 353.00 in Hotel Property Investments on September 25, 2024 and sell it today you would earn a total of 25.00 from holding Hotel Property Investments or generate 7.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Queensland vs. Hotel Property Investments
Performance |
Timeline |
Bank of Queensland |
Hotel Property Inves |
Bank of Queensland and Hotel Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Queensland and Hotel Property
The main advantage of trading using opposite Bank of Queensland and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.Bank of Queensland vs. Hotel Property Investments | Bank of Queensland vs. Queste Communications | Bank of Queensland vs. Collins Foods | Bank of Queensland vs. Australian Strategic Materials |
Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Carindale Property Trust |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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