Correlation Between PPHE Hotel and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel and Falcon Oil 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 PPHE Hotel and Falcon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Falcon Oil Gas, you can compare the effects of market volatilities on PPHE Hotel and Falcon Oil 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 PPHE Hotel with a short position of Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Falcon Oil.
Diversification Opportunities for PPHE Hotel and Falcon Oil
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PPHE and Falcon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas and PPHE 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 PPHE Hotel Group are associated (or correlated) with Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of PPHE Hotel i.e., PPHE Hotel and Falcon Oil go up and down completely randomly.
Pair Corralation between PPHE Hotel and Falcon Oil
Assuming the 90 days trading horizon PPHE Hotel Group is expected to under-perform the Falcon Oil. But the stock apears to be less risky and, when comparing its historical volatility, PPHE Hotel Group is 3.64 times less risky than Falcon Oil. The stock trades about -0.16 of its potential returns per unit of risk. The Falcon Oil Gas is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 445.00 in Falcon Oil Gas on December 29, 2024 and sell it today you would earn a total of 175.00 from holding Falcon Oil Gas or generate 39.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PPHE Hotel Group vs. Falcon Oil Gas
Performance |
Timeline |
PPHE Hotel Group |
Falcon Oil Gas |
PPHE Hotel and Falcon Oil Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PPHE Hotel and Falcon Oil
The main advantage of trading using opposite PPHE Hotel and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel position performs unexpectedly, Falcon Oil 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 Falcon Oil will offset losses from the drop in Falcon Oil's long position.PPHE Hotel vs. Cairo Communication SpA | PPHE Hotel vs. United Internet AG | PPHE Hotel vs. Tata Steel Limited | PPHE Hotel vs. Aeorema Communications Plc |
Falcon Oil vs. BW Offshore | Falcon Oil vs. Flow Traders NV | Falcon Oil vs. China Pacific Insurance | Falcon Oil vs. Ecofin Global Utilities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |