Correlation Between NH Hoteles and Azaria Rental

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

By analyzing existing cross correlation between NH Hoteles and Azaria Rental SOCIMI, you can compare the effects of market volatilities on NH Hoteles and Azaria Rental 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 Hoteles with a short position of Azaria Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Hoteles and Azaria Rental.

Diversification Opportunities for NH Hoteles and Azaria Rental

-0.01

Correlation Coefficient

NH Hoteles  Azaria Rental

Good diversification

The 3 months correlation between NHH and Azaria is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NH Hoteles and Azaria Rental SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azaria Rental SOCIMI and NH Hoteles 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 Hoteles are associated (or correlated) with Azaria Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azaria Rental SOCIMI has no effect on the direction of NH Hoteles i.e., NH Hoteles and Azaria Rental go up and down completely randomly.

Pair Corralation between NH Hoteles and Azaria Rental

Assuming the 90 days trading horizon NH Hoteles is expected to generate 3.29 times more return on investment than Azaria Rental. However, NH Hoteles is 3.29 times more volatile than Azaria Rental SOCIMI. It trades about 0.11 of its potential returns per unit of risk. Azaria Rental SOCIMI is currently generating about -0.13 per unit of risk. If you would invest  414.00  in NH Hoteles on September 14, 2024 and sell it today you would earn a total of  42.00  from holding NH Hoteles or generate 10.14% return on investment over 90 days.

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

NH Hoteles  vs.  Azaria Rental SOCIMI

NH Hoteles

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NH Hoteles are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, NH Hoteles may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Azaria Rental SOCIMI

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with NH Hoteles and Azaria Rental

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

The idea behind NH Hoteles and Azaria Rental SOCIMI 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.