Correlation Between Dalata Hotel and GENTING SG

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

Diversification Opportunities for Dalata Hotel and GENTING SG

-0.62

Correlation Coefficient

Dalata Hotel  GENTING SG

Excellent diversification

The 3 months correlation between Dalata and GENTING is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and GENTING SG LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENTING SG LTD 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 GENTING SG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENTING SG LTD has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and GENTING SG go up and down completely randomly.

Pair Corralation between Dalata Hotel and GENTING SG

Assuming the 90 days horizon Dalata Hotel Group is expected to generate 0.53 times more return on investment than GENTING SG. However, Dalata Hotel Group is 1.88 times less risky than GENTING SG. It trades about 0.14 of its potential returns per unit of risk. GENTING SG LTD is currently generating about 0.03 per unit of risk. If you would invest  433.00  in Dalata Hotel Group on October 26, 2024 and sell it today you would earn a total of  42.00  from holding Dalata Hotel Group or generate 9.7% 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.  GENTING SG LTD

Dalata Hotel Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel reported solid returns over the last few months and may actually be approaching a breakup point.

GENTING SG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GENTING SG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Dalata Hotel and GENTING SG

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

The idea behind Dalata Hotel Group and GENTING SG 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.