Correlation Between Semiconductor Manufacturing and NH HOTEL

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

By analyzing existing cross correlation between Semiconductor Manufacturing International and NH HOTEL GROUP, you can compare the effects of market volatilities on Semiconductor Manufacturing and NH 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 Semiconductor Manufacturing with a short position of NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Manufacturing and NH HOTEL.

Diversification Opportunities for Semiconductor Manufacturing and NH HOTEL

0.0

Correlation Coefficient

Semiconductor Manufacturing  NH HOTEL

Pay attention - limited upside

The 3 months correlation between Semiconductor and NH5 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Manufacturing In and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP and Semiconductor Manufacturing 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 Semiconductor Manufacturing International are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Semiconductor Manufacturing i.e., Semiconductor Manufacturing and NH HOTEL go up and down completely randomly.

Pair Corralation between Semiconductor Manufacturing and NH HOTEL

If you would invest  340.00  in Semiconductor Manufacturing International on December 25, 2024 and sell it today you would earn a total of  0.00  from holding Semiconductor Manufacturing International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Semiconductor Manufacturing In  vs.  NH HOTEL GROUP

Semiconductor Manufacturing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semiconductor Manufacturing International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Semiconductor Manufacturing is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

NH HOTEL GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days NH HOTEL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NH HOTEL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Semiconductor Manufacturing and NH HOTEL

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

The idea behind Semiconductor Manufacturing International and NH 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.