Correlation Between Grupo Hotelero and Danaher
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and Danaher 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 Grupo Hotelero and Danaher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Hotelero Santa and Danaher, you can compare the effects of market volatilities on Grupo Hotelero and Danaher 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 Grupo Hotelero with a short position of Danaher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and Danaher.
Diversification Opportunities for Grupo Hotelero and Danaher
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and Danaher is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher and Grupo Hotelero 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 Grupo Hotelero Santa are associated (or correlated) with Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and Danaher go up and down completely randomly.
Pair Corralation between Grupo Hotelero and Danaher
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to generate 0.94 times more return on investment than Danaher. However, Grupo Hotelero Santa is 1.07 times less risky than Danaher. It trades about -0.04 of its potential returns per unit of risk. Danaher is currently generating about -0.1 per unit of risk. If you would invest 400.00 in Grupo Hotelero Santa on December 2, 2024 and sell it today you would lose (24.00) from holding Grupo Hotelero Santa or give up 6.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Grupo Hotelero Santa vs. Danaher
Performance |
Timeline |
Grupo Hotelero Santa |
Danaher |
Grupo Hotelero and Danaher Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Hotelero and Danaher
The main advantage of trading using opposite Grupo Hotelero and Danaher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, Danaher 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 Danaher will offset losses from the drop in Danaher's long position.Grupo Hotelero vs. Genworth Financial | Grupo Hotelero vs. Martin Marietta Materials | Grupo Hotelero vs. Verizon Communications | Grupo Hotelero vs. Air Transport Services |
Danaher vs. Prudential Financial | Danaher vs. Air Transport Services | Danaher vs. The Home Depot | Danaher vs. Monster Beverage Corp |
Check out your portfolio center.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.
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