Correlation Between Cebu Air and LuxUrban Hotels
Can any of the company-specific risk be diversified away by investing in both Cebu Air and LuxUrban Hotels 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 Cebu Air and LuxUrban Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and LuxUrban Hotels 1300, you can compare the effects of market volatilities on Cebu Air and LuxUrban Hotels 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 Cebu Air with a short position of LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and LuxUrban Hotels.
Diversification Opportunities for Cebu Air and LuxUrban Hotels
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cebu and LuxUrban is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and LuxUrban Hotels 1300 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels 1300 and Cebu Air 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 Cebu Air ADR are associated (or correlated) with LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels 1300 has no effect on the direction of Cebu Air i.e., Cebu Air and LuxUrban Hotels go up and down completely randomly.
Pair Corralation between Cebu Air and LuxUrban Hotels
If you would invest 185.00 in Cebu Air ADR on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Cebu Air ADR or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 81.82% |
Values | Daily Returns |
Cebu Air ADR vs. LuxUrban Hotels 1300
Performance |
Timeline |
Cebu Air ADR |
LuxUrban Hotels 1300 |
Cebu Air and LuxUrban Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cebu Air and LuxUrban Hotels
The main advantage of trading using opposite Cebu Air and LuxUrban Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, LuxUrban Hotels 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 LuxUrban Hotels will offset losses from the drop in LuxUrban Hotels' long position.Cebu Air vs. Tegna Inc | Cebu Air vs. Exchange Bankshares | Cebu Air vs. McGrath RentCorp | Cebu Air vs. Ginkgo Bioworks Holdings |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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