Correlation Between ANGANG STEEL and COVIVIO HOTELS

Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and COVIVIO 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 ANGANG STEEL and COVIVIO HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANGANG STEEL H and COVIVIO HOTELS INH, you can compare the effects of market volatilities on ANGANG STEEL and COVIVIO 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 ANGANG STEEL with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and COVIVIO HOTELS.

Diversification Opportunities for ANGANG STEEL and COVIVIO HOTELS

0.01

Correlation Coefficient

ANGANG STEEL  COVIVIO HOTELS

Significant diversification

The 3 months correlation between ANGANG and COVIVIO is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and COVIVIO HOTELS go up and down completely randomly.

Pair Corralation between ANGANG STEEL and COVIVIO HOTELS

Assuming the 90 days trading horizon ANGANG STEEL H is expected to under-perform the COVIVIO HOTELS. In addition to that, ANGANG STEEL is 2.09 times more volatile than COVIVIO HOTELS INH. It trades about -0.09 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.2 per unit of volatility. If you would invest  1,820  in COVIVIO HOTELS INH on October 7, 2024 and sell it today you would earn a total of  200.00  from holding COVIVIO HOTELS INH or generate 10.99% return on investment over 90 days.

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

ANGANG STEEL H   vs.  COVIVIO HOTELS INH

ANGANG STEEL H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGANG STEEL H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

COVIVIO HOTELS INH

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COVIVIO HOTELS INH are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COVIVIO HOTELS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ANGANG STEEL and COVIVIO HOTELS

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

The idea behind ANGANG STEEL H and COVIVIO HOTELS INH 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.