Correlation Between NH Hoteles and Vivenio Residencial

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

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

Diversification Opportunities for NH Hoteles and Vivenio Residencial

0.26

Correlation Coefficient

NH Hoteles  Vivenio Residencial

Modest diversification

The 3 months correlation between NHH and Vivenio is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NH Hoteles and Vivenio Residencial SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivenio Residencial 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 Vivenio Residencial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivenio Residencial has no effect on the direction of NH Hoteles i.e., NH Hoteles and Vivenio Residencial go up and down completely randomly.

Pair Corralation between NH Hoteles and Vivenio Residencial

If you would invest  435.00  in NH Hoteles on September 15, 2024 and sell it today you would earn a total of  28.00  from holding NH Hoteles or generate 6.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

NH Hoteles  vs.  Vivenio Residencial SOCIMI

NH Hoteles

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NH Hoteles are ranked lower than 10 (%) 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.

Vivenio Residencial

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with NH Hoteles and Vivenio Residencial

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

The idea behind NH Hoteles and Vivenio Residencial 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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.