Correlation Between CONSTANCE HOTELS and HOTELEST

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

By analyzing existing cross correlation between CONSTANCE HOTELS SERVICES and HOTELEST LTD, you can compare the effects of market volatilities on CONSTANCE HOTELS and HOTELEST 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 CONSTANCE HOTELS with a short position of HOTELEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSTANCE HOTELS and HOTELEST.

Diversification Opportunities for CONSTANCE HOTELS and HOTELEST

0.0

Correlation Coefficient

CONSTANCE HOTELS  HOTELEST

Pay attention - limited upside

The 3 months correlation between CONSTANCE and HOTELEST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CONSTANCE HOTELS SERVICES and HOTELEST LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOTELEST LTD and CONSTANCE HOTELS 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 CONSTANCE HOTELS SERVICES are associated (or correlated) with HOTELEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOTELEST LTD has no effect on the direction of CONSTANCE HOTELS i.e., CONSTANCE HOTELS and HOTELEST go up and down completely randomly.

Pair Corralation between CONSTANCE HOTELS and HOTELEST

If you would invest  1,675  in HOTELEST LTD on October 27, 2024 and sell it today you would earn a total of  0.00  from holding HOTELEST LTD or generate 0.0% return on investment over 90 days.

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

CONSTANCE HOTELS SERVICES  vs.  HOTELEST LTD

CONSTANCE HOTELS SERVICES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONSTANCE HOTELS SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CONSTANCE HOTELS is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

HOTELEST LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOTELEST LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, HOTELEST is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CONSTANCE HOTELS and HOTELEST

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

The idea behind CONSTANCE HOTELS SERVICES and HOTELEST LTD 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.