Correlation Between NH HOTEL and THARISA NON

Can any of the company-specific risk be diversified away by investing in both NH HOTEL and THARISA NON 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 NH HOTEL and THARISA NON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NH HOTEL GROUP and THARISA NON LIST, you can compare the effects of market volatilities on NH HOTEL and THARISA NON 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 NH HOTEL with a short position of THARISA NON. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and THARISA NON.

Diversification Opportunities for NH HOTEL and THARISA NON

-0.1

Correlation Coefficient

NH HOTEL  THARISA NON

Good diversification

The 3 months correlation between NH5 and THARISA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and THARISA NON LIST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THARISA NON LIST and NH 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 NH HOTEL GROUP are associated (or correlated) with THARISA NON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THARISA NON LIST has no effect on the direction of NH HOTEL i.e., NH HOTEL and THARISA NON go up and down completely randomly.

Pair Corralation between NH HOTEL and THARISA NON

Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 0.2 times more return on investment than THARISA NON. However, NH HOTEL GROUP is 4.88 times less risky than THARISA NON. It trades about 0.01 of its potential returns per unit of risk. THARISA NON LIST is currently generating about 0.0 per unit of risk. If you would invest  626.00  in NH HOTEL GROUP on December 29, 2024 and sell it today you would earn a total of  2.00  from holding NH HOTEL GROUP or generate 0.32% return on investment over 90 days.

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

NH HOTEL GROUP  vs.  THARISA NON LIST

NH HOTEL GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days NH HOTEL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NH HOTEL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

THARISA NON LIST

Risk-Adjusted Performance

Very Weak

Over the last 90 days THARISA NON LIST has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, THARISA NON is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NH HOTEL and THARISA NON

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

The idea behind NH HOTEL GROUP and THARISA NON LIST 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.