Correlation Between Grande Hospitality and Amata Public

Can any of the company-specific risk be diversified away by investing in both Grande Hospitality and Amata Public 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 Grande Hospitality and Amata Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grande Hospitality Real and Amata Public, you can compare the effects of market volatilities on Grande Hospitality and Amata Public 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 Grande Hospitality with a short position of Amata Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Hospitality and Amata Public.

Diversification Opportunities for Grande Hospitality and Amata Public

-0.11

Correlation Coefficient

Grande Hospitality  Amata Public

Good diversification

The 3 months correlation between Grande and Amata is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Grande Hospitality Real and Amata Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amata Public and Grande Hospitality 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 Grande Hospitality Real are associated (or correlated) with Amata Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amata Public has no effect on the direction of Grande Hospitality i.e., Grande Hospitality and Amata Public go up and down completely randomly.

Pair Corralation between Grande Hospitality and Amata Public

Assuming the 90 days trading horizon Grande Hospitality Real is expected to generate 1.38 times more return on investment than Amata Public. However, Grande Hospitality is 1.38 times more volatile than Amata Public. It trades about 0.04 of its potential returns per unit of risk. Amata Public is currently generating about -0.13 per unit of risk. If you would invest  638.00  in Grande Hospitality Real on December 25, 2024 and sell it today you would earn a total of  12.00  from holding Grande Hospitality Real or generate 1.88% return on investment over 90 days.

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

Grande Hospitality Real  vs.  Amata Public

Grande Hospitality Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grande Hospitality Real are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grande Hospitality is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Amata Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amata Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Amata Public 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 Grande Hospitality and Amata Public

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

The idea behind Grande Hospitality Real and Amata Public 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.