Correlation Between Fattal 1998 and Dan Hotels

Can any of the company-specific risk be diversified away by investing in both Fattal 1998 and Dan Hotels 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 Fattal 1998 and Dan Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fattal 1998 Holdings and Dan Hotels, you can compare the effects of market volatilities on Fattal 1998 and Dan Hotels 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 Fattal 1998 with a short position of Dan Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fattal 1998 and Dan Hotels.

Diversification Opportunities for Fattal 1998 and Dan Hotels

-0.14

Correlation Coefficient

Fattal 1998  Dan Hotels

Good diversification

The 3 months correlation between Fattal and Dan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fattal 1998 Holdings and Dan Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dan Hotels and Fattal 1998 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 Fattal 1998 Holdings are associated (or correlated) with Dan Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dan Hotels has no effect on the direction of Fattal 1998 i.e., Fattal 1998 and Dan Hotels go up and down completely randomly.

Pair Corralation between Fattal 1998 and Dan Hotels

Assuming the 90 days trading horizon Fattal 1998 Holdings is expected to under-perform the Dan Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Fattal 1998 Holdings is 1.09 times less risky than Dan Hotels. The stock trades about -0.2 of its potential returns per unit of risk. The Dan Hotels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  221,800  in Dan Hotels on December 27, 2024 and sell it today you would earn a total of  13,200  from holding Dan Hotels or generate 5.95% return on investment over 90 days.

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

Fattal 1998 Holdings  vs.  Dan Hotels

Fattal 1998 Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fattal 1998 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dan Hotels

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dan Hotels are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dan Hotels may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fattal 1998 and Dan Hotels

The main advantage of trading using opposite Fattal 1998 and Dan Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fattal 1998 position performs unexpectedly, Dan Hotels 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 Dan Hotels will offset losses from the drop in Dan Hotels' long position.

The idea behind Fattal 1998 Holdings and Dan Hotels 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.