Correlation Between Dalata Hotel and KLP AksjeEuropa

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

Diversification Opportunities for Dalata Hotel and KLP AksjeEuropa

-0.51

Correlation Coefficient

Dalata Hotel  KLP AksjeEuropa

Excellent diversification

The 3 months correlation between Dalata and KLP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and KLP AksjeEuropa Indeks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLP AksjeEuropa Indeks 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 KLP AksjeEuropa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLP AksjeEuropa Indeks has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and KLP AksjeEuropa go up and down completely randomly.

Pair Corralation between Dalata Hotel and KLP AksjeEuropa

Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 1.98 times more return on investment than KLP AksjeEuropa. However, Dalata Hotel is 1.98 times more volatile than KLP AksjeEuropa Indeks. It trades about 0.11 of its potential returns per unit of risk. KLP AksjeEuropa Indeks is currently generating about 0.02 per unit of risk. If you would invest  410.00  in Dalata Hotel Group on September 17, 2024 and sell it today you would earn a total of  37.00  from holding Dalata Hotel Group or generate 9.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Dalata Hotel Group  vs.  KLP AksjeEuropa Indeks

Dalata Hotel Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Dalata Hotel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

KLP AksjeEuropa Indeks

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KLP AksjeEuropa Indeks are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, KLP AksjeEuropa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dalata Hotel and KLP AksjeEuropa

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

The idea behind Dalata Hotel Group and KLP AksjeEuropa Indeks 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.