Correlation Between MIRAMAR HOTEL and Perdoceo Education

Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Perdoceo Education 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 Perdoceo Education 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 Perdoceo Education, you can compare the effects of market volatilities on MIRAMAR HOTEL and Perdoceo Education 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 Perdoceo Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Perdoceo Education.

Diversification Opportunities for MIRAMAR HOTEL and Perdoceo Education

0.13

Correlation Coefficient

MIRAMAR HOTEL  Perdoceo Education

Average diversification

The 3 months correlation between MIRAMAR and Perdoceo is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Perdoceo Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdoceo Education 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 Perdoceo Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdoceo Education has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Perdoceo Education go up and down completely randomly.

Pair Corralation between MIRAMAR HOTEL and Perdoceo Education

Assuming the 90 days trading horizon MIRAMAR HOTEL is expected to generate 8.93 times less return on investment than Perdoceo Education. But when comparing it to its historical volatility, MIRAMAR HOTEL INV is 5.03 times less risky than Perdoceo Education. It trades about 0.11 of its potential returns per unit of risk. Perdoceo Education is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,010  in Perdoceo Education on October 6, 2024 and sell it today you would earn a total of  510.00  from holding Perdoceo Education or generate 25.37% return on investment over 90 days.

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

MIRAMAR HOTEL INV  vs.  Perdoceo Education

MIRAMAR HOTEL INV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Perdoceo Education

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perdoceo Education are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perdoceo Education reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MIRAMAR HOTEL and Perdoceo Education

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

The idea behind MIRAMAR HOTEL INV and Perdoceo Education 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.