Correlation Between Hotel Property and Garda Diversified

Can any of the company-specific risk be diversified away by investing in both Hotel Property and Garda Diversified 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 Hotel Property and Garda Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hotel Property Investments and Garda Diversified Ppty, you can compare the effects of market volatilities on Hotel Property and Garda Diversified 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 Hotel Property with a short position of Garda Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Garda Diversified.

Diversification Opportunities for Hotel Property and Garda Diversified

0.2

Correlation Coefficient

Hotel Property  Garda Diversified

Modest diversification

The 3 months correlation between Hotel and Garda is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Garda Diversified Ppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garda Diversified Ppty and Hotel Property 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 Hotel Property Investments are associated (or correlated) with Garda Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garda Diversified Ppty has no effect on the direction of Hotel Property i.e., Hotel Property and Garda Diversified go up and down completely randomly.

Pair Corralation between Hotel Property and Garda Diversified

Assuming the 90 days trading horizon Hotel Property is expected to generate 1.47 times less return on investment than Garda Diversified. But when comparing it to its historical volatility, Hotel Property Investments is 1.14 times less risky than Garda Diversified. It trades about 0.09 of its potential returns per unit of risk. Garda Diversified Ppty is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  110.00  in Garda Diversified Ppty on September 3, 2024 and sell it today you would earn a total of  12.00  from holding Garda Diversified Ppty or generate 10.91% return on investment over 90 days.

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

Hotel Property Investments  vs.  Garda Diversified Ppty

Hotel Property Inves

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hotel Property Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Hotel Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Garda Diversified Ppty

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Garda Diversified Ppty are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Garda Diversified may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hotel Property and Garda Diversified

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

The idea behind Hotel Property Investments and Garda Diversified Ppty 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.