Correlation Between MIRAMAR HOTEL and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and EBRO FOODS 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 MIRAMAR HOTEL and EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIRAMAR HOTEL INV and EBRO FOODS, you can compare the effects of market volatilities on MIRAMAR HOTEL and EBRO FOODS 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 MIRAMAR HOTEL with a short position of EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and EBRO FOODS.
Diversification Opportunities for MIRAMAR HOTEL and EBRO FOODS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MIRAMAR and EBRO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV are associated (or correlated) with EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and EBRO FOODS go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and EBRO FOODS
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to under-perform the EBRO FOODS. But the stock apears to be less risky and, when comparing its historical volatility, MIRAMAR HOTEL INV is 1.28 times less risky than EBRO FOODS. The stock trades about -0.09 of its potential returns per unit of risk. The EBRO FOODS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,608 in EBRO FOODS on October 28, 2024 and sell it today you would lose (22.00) from holding EBRO FOODS or give up 1.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MIRAMAR HOTEL INV vs. EBRO FOODS
Performance |
Timeline |
MIRAMAR HOTEL INV |
EBRO FOODS |
MIRAMAR HOTEL and EBRO FOODS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MIRAMAR HOTEL and EBRO FOODS
The main advantage of trading using opposite MIRAMAR HOTEL and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.MIRAMAR HOTEL vs. PTT Global Chemical | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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