Correlation Between NICO HOLDINGS and BLANTYRE HOTELS

Can any of the company-specific risk be diversified away by investing in both NICO HOLDINGS and BLANTYRE HOTELS 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 NICO HOLDINGS and BLANTYRE HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NICO HOLDINGS LIMITED and BLANTYRE HOTELS LIMITED, you can compare the effects of market volatilities on NICO HOLDINGS and BLANTYRE HOTELS 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 NICO HOLDINGS with a short position of BLANTYRE HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICO HOLDINGS and BLANTYRE HOTELS.

Diversification Opportunities for NICO HOLDINGS and BLANTYRE HOTELS

0.51

Correlation Coefficient

NICO HOLDINGS  BLANTYRE HOTELS

Very weak diversification

The 3 months correlation between NICO and BLANTYRE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NICO HOLDINGS LIMITED and BLANTYRE HOTELS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLANTYRE HOTELS and NICO HOLDINGS 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 NICO HOLDINGS LIMITED are associated (or correlated) with BLANTYRE HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLANTYRE HOTELS has no effect on the direction of NICO HOLDINGS i.e., NICO HOLDINGS and BLANTYRE HOTELS go up and down completely randomly.

Pair Corralation between NICO HOLDINGS and BLANTYRE HOTELS

If you would invest  1,455  in BLANTYRE HOTELS LIMITED on October 20, 2024 and sell it today you would earn a total of  0.00  from holding BLANTYRE HOTELS LIMITED or generate 0.0% return on investment over 90 days.

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

NICO HOLDINGS LIMITED  vs.  BLANTYRE HOTELS LIMITED

NICO HOLDINGS LIMITED

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in NICO HOLDINGS LIMITED are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NICO HOLDINGS unveiled solid returns over the last few months and may actually be approaching a breakup point.

BLANTYRE HOTELS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BLANTYRE HOTELS LIMITED are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, BLANTYRE HOTELS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NICO HOLDINGS and BLANTYRE HOTELS

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

The idea behind NICO HOLDINGS LIMITED and BLANTYRE HOTELS LIMITED 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.