Correlation Between LuxUrban Hotels and Mamas Creations
Can any of the company-specific risk be diversified away by investing in both LuxUrban Hotels and Mamas Creations 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 LuxUrban Hotels and Mamas Creations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LuxUrban Hotels 1300 and Mamas Creations, you can compare the effects of market volatilities on LuxUrban Hotels and Mamas Creations 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 LuxUrban Hotels with a short position of Mamas Creations. Check out your portfolio center. Please also check ongoing floating volatility patterns of LuxUrban Hotels and Mamas Creations.
Diversification Opportunities for LuxUrban Hotels and Mamas Creations
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between LuxUrban and Mamas is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LuxUrban Hotels 1300 and Mamas Creations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mamas Creations and LuxUrban Hotels 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 LuxUrban Hotels 1300 are associated (or correlated) with Mamas Creations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mamas Creations has no effect on the direction of LuxUrban Hotels i.e., LuxUrban Hotels and Mamas Creations go up and down completely randomly.
Pair Corralation between LuxUrban Hotels and Mamas Creations
Assuming the 90 days horizon LuxUrban Hotels 1300 is expected to under-perform the Mamas Creations. But the preferred stock apears to be less risky and, when comparing its historical volatility, LuxUrban Hotels 1300 is 5.05 times less risky than Mamas Creations. The preferred stock trades about 0.0 of its potential returns per unit of risk. The Mamas Creations is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 193.00 in Mamas Creations on October 10, 2024 and sell it today you would earn a total of 518.00 from holding Mamas Creations or generate 268.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 60.12% |
Values | Daily Returns |
LuxUrban Hotels 1300 vs. Mamas Creations
Performance |
Timeline |
LuxUrban Hotels 1300 |
Mamas Creations |
LuxUrban Hotels and Mamas Creations Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LuxUrban Hotels and Mamas Creations
The main advantage of trading using opposite LuxUrban Hotels and Mamas Creations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LuxUrban Hotels position performs unexpectedly, Mamas Creations 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 Mamas Creations will offset losses from the drop in Mamas Creations' long position.LuxUrban Hotels vs. National Vision Holdings | LuxUrban Hotels vs. SunOpta | LuxUrban Hotels vs. NH Foods Ltd | LuxUrban Hotels vs. Rocky Mountain Chocolate |
Mamas Creations vs. Dennys Corp | Mamas Creations vs. Bt Brands | Mamas Creations vs. Kura Sushi USA | Mamas Creations vs. LuxUrban Hotels 1300 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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