Correlation Between Dalata Hotel and BH Macro
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and BH Macro 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 Dalata Hotel and BH Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and BH Macro Limited, you can compare the effects of market volatilities on Dalata Hotel and BH Macro 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 Dalata Hotel with a short position of BH Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and BH Macro.
Diversification Opportunities for Dalata Hotel and BH Macro
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dalata and BHMU is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and BH Macro Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Macro Limited and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with BH Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Macro Limited has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and BH Macro go up and down completely randomly.
Pair Corralation between Dalata Hotel and BH Macro
Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 2.16 times more return on investment than BH Macro. However, Dalata Hotel is 2.16 times more volatile than BH Macro Limited. It trades about 0.14 of its potential returns per unit of risk. BH Macro Limited is currently generating about -0.09 per unit of risk. If you would invest 38,500 in Dalata Hotel Group on December 22, 2024 and sell it today you would earn a total of 8,400 from holding Dalata Hotel Group or generate 21.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dalata Hotel Group vs. BH Macro Limited
Performance |
Timeline |
Dalata Hotel Group |
BH Macro Limited |
Dalata Hotel and BH Macro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dalata Hotel and BH Macro
The main advantage of trading using opposite Dalata Hotel and BH Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, BH Macro 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 BH Macro will offset losses from the drop in BH Macro's long position.Dalata Hotel vs. Clean Power Hydrogen | Dalata Hotel vs. Southwest Airlines Co | Dalata Hotel vs. PPHE Hotel Group | Dalata Hotel vs. United States Steel |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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