Correlation Between Mineral Financial and Dalata Hotel

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

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

Diversification Opportunities for Mineral Financial and Dalata Hotel

0.18

Correlation Coefficient

Mineral Financial  Dalata Hotel

Average diversification

The 3 months correlation between Mineral and Dalata is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Financial Investments and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and Mineral Financial 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 Mineral Financial Investments are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Mineral Financial i.e., Mineral Financial and Dalata Hotel go up and down completely randomly.

Pair Corralation between Mineral Financial and Dalata Hotel

Assuming the 90 days trading horizon Mineral Financial Investments is expected to generate 1.72 times more return on investment than Dalata Hotel. However, Mineral Financial is 1.72 times more volatile than Dalata Hotel Group. It trades about 0.07 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.1 per unit of risk. If you would invest  1,160  in Mineral Financial Investments on October 12, 2024 and sell it today you would earn a total of  140.00  from holding Mineral Financial Investments or generate 12.07% return on investment over 90 days.

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

Mineral Financial Investments  vs.  Dalata Hotel Group

Mineral Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Financial Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mineral Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dalata Hotel Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Dalata Hotel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mineral Financial and Dalata Hotel

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

The idea behind Mineral Financial Investments and Dalata Hotel Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.