Correlation Between MIRAMAR HOTEL and Hongkong

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

Diversification Opportunities for MIRAMAR HOTEL and Hongkong

0.43

Correlation Coefficient

MIRAMAR HOTEL  Hongkong

Very weak diversification

The 3 months correlation between MIRAMAR and Hongkong is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Hongkong go up and down completely randomly.

Pair Corralation between MIRAMAR HOTEL and Hongkong

Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to under-perform the Hongkong. But the stock apears to be less risky and, when comparing its historical volatility, MIRAMAR HOTEL INV is 1.3 times less risky than Hongkong. The stock trades about -0.3 of its potential returns per unit of risk. The The Hongkong and is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  74.00  in The Hongkong and on October 26, 2024 and sell it today you would lose (1.00) from holding The Hongkong and or give up 1.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

MIRAMAR HOTEL INV  vs.  The Hongkong and

MIRAMAR HOTEL INV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MIRAMAR HOTEL INV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

The Hongkong

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Hongkong and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hongkong reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MIRAMAR HOTEL and Hongkong

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

The idea behind MIRAMAR HOTEL INV and The Hongkong and 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.