Correlation Between BEBO Health and Hotel Majestic
Can any of the company-specific risk be diversified away by investing in both BEBO Health and Hotel Majestic 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 BEBO Health and Hotel Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEBO Health SA and Hotel Majestic Cannes, you can compare the effects of market volatilities on BEBO Health and Hotel Majestic 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 BEBO Health with a short position of Hotel Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEBO Health and Hotel Majestic.
Diversification Opportunities for BEBO Health and Hotel Majestic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BEBO and Hotel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BEBO Health SA and Hotel Majestic Cannes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Majestic Cannes and BEBO Health 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 BEBO Health SA are associated (or correlated) with Hotel Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Majestic Cannes has no effect on the direction of BEBO Health i.e., BEBO Health and Hotel Majestic go up and down completely randomly.
Pair Corralation between BEBO Health and Hotel Majestic
Assuming the 90 days trading horizon BEBO Health SA is expected to under-perform the Hotel Majestic. But the stock apears to be less risky and, when comparing its historical volatility, BEBO Health SA is 1.1 times less risky than Hotel Majestic. The stock trades about -0.06 of its potential returns per unit of risk. The Hotel Majestic Cannes is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 407,661 in Hotel Majestic Cannes on December 2, 2024 and sell it today you would earn a total of 112,339 from holding Hotel Majestic Cannes or generate 27.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.98% |
Values | Daily Returns |
BEBO Health SA vs. Hotel Majestic Cannes
Performance |
Timeline |
BEBO Health SA |
Hotel Majestic Cannes |
BEBO Health and Hotel Majestic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BEBO Health and Hotel Majestic
The main advantage of trading using opposite BEBO Health and Hotel Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEBO Health position performs unexpectedly, Hotel Majestic 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 Hotel Majestic will offset losses from the drop in Hotel Majestic's long position.BEBO Health vs. Reworld Media | BEBO Health vs. Impulse Fitness Solutions | BEBO Health vs. Bilendi | BEBO Health vs. Eutelsat Communications SA |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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