Correlation Between MIRAMAR HOTEL and TC Energy

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

Diversification Opportunities for MIRAMAR HOTEL and TC Energy

0.35

Correlation Coefficient

MIRAMAR HOTEL  TC Energy

Weak diversification

The 3 months correlation between MIRAMAR and TRS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and TC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and TC Energy go up and down completely randomly.

Pair Corralation between MIRAMAR HOTEL and TC Energy

Assuming the 90 days trading horizon MIRAMAR HOTEL is expected to generate 1.05 times less return on investment than TC Energy. In addition to that, MIRAMAR HOTEL is 1.6 times more volatile than TC Energy. It trades about 0.08 of its total potential returns per unit of risk. TC Energy is currently generating about 0.14 per unit of volatility. If you would invest  3,425  in TC Energy on September 26, 2024 and sell it today you would earn a total of  954.00  from holding TC Energy or generate 27.85% return on investment over 90 days.

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

MIRAMAR HOTEL INV  vs.  TC Energy

MIRAMAR HOTEL INV

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 4 (%) 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

TC Energy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TC Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TC Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MIRAMAR HOTEL and TC Energy

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

The idea behind MIRAMAR HOTEL INV and TC Energy 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.