Correlation Between Dalata Hotel and Irish Continental

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

Diversification Opportunities for Dalata Hotel and Irish Continental

0.63

Correlation Coefficient

Dalata Hotel  Irish Continental

Poor diversification

The 3 months correlation between Dalata and Irish is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Irish Continental Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Irish Continental 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 Irish Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Irish Continental has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Irish Continental go up and down completely randomly.

Pair Corralation between Dalata Hotel and Irish Continental

Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 1.43 times more return on investment than Irish Continental. However, Dalata Hotel is 1.43 times more volatile than Irish Continental Group. It trades about 0.1 of its potential returns per unit of risk. Irish Continental Group is currently generating about 0.06 per unit of risk. If you would invest  468.00  in Dalata Hotel Group on December 30, 2024 and sell it today you would earn a total of  58.00  from holding Dalata Hotel Group or generate 12.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Dalata Hotel Group  vs.  Irish Continental Group

Dalata Hotel Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 7 (%) 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 April 2025.

Irish Continental

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Irish Continental Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Irish Continental is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Dalata Hotel and Irish Continental

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

The idea behind Dalata Hotel Group and Irish Continental Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.