Correlation Between Dalata Hotel and Gfinity PLC

Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and Gfinity PLC 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 Gfinity PLC 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 Gfinity PLC, you can compare the effects of market volatilities on Dalata Hotel and Gfinity PLC 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 Gfinity PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Gfinity PLC.

Diversification Opportunities for Dalata Hotel and Gfinity PLC

0.07

Correlation Coefficient

Dalata Hotel  Gfinity PLC

Significant diversification

The 3 months correlation between Dalata and Gfinity is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Gfinity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfinity PLC 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 Gfinity PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfinity PLC has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Gfinity PLC go up and down completely randomly.

Pair Corralation between Dalata Hotel and Gfinity PLC

If you would invest  33,295  in Dalata Hotel Group on October 25, 2024 and sell it today you would earn a total of  6,205  from holding Dalata Hotel Group or generate 18.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dalata Hotel Group  vs.  Gfinity PLC

Dalata Hotel Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Dalata Hotel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gfinity PLC

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Gfinity PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Gfinity PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dalata Hotel and Gfinity PLC

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

The idea behind Dalata Hotel Group and Gfinity PLC 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 Stocks Directory module to find actively traded stocks across global markets.