Correlation Between HOTELEST and PSG FINANCIAL

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

By analyzing existing cross correlation between HOTELEST LTD and PSG FINANCIAL SERVICES, you can compare the effects of market volatilities on HOTELEST and PSG FINANCIAL 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 HOTELEST with a short position of PSG FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOTELEST and PSG FINANCIAL.

Diversification Opportunities for HOTELEST and PSG FINANCIAL

0.0

Correlation Coefficient

HOTELEST  PSG FINANCIAL

Pay attention - limited upside

The 3 months correlation between HOTELEST and PSG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HOTELEST LTD and PSG FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSG FINANCIAL SERVICES and HOTELEST 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 HOTELEST LTD are associated (or correlated) with PSG FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSG FINANCIAL SERVICES has no effect on the direction of HOTELEST i.e., HOTELEST and PSG FINANCIAL go up and down completely randomly.

Pair Corralation between HOTELEST and PSG FINANCIAL

If you would invest  80.00  in PSG FINANCIAL SERVICES on December 28, 2024 and sell it today you would earn a total of  0.00  from holding PSG FINANCIAL SERVICES or generate 0.0% return on investment over 90 days.

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

HOTELEST LTD  vs.  PSG FINANCIAL SERVICES

HOTELEST LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days HOTELEST LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, HOTELEST is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

PSG FINANCIAL SERVICES

Risk-Adjusted Performance

Very Weak

Over the last 90 days PSG FINANCIAL SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PSG FINANCIAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HOTELEST and PSG FINANCIAL

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

The idea behind HOTELEST LTD and PSG FINANCIAL SERVICES 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.