Correlation Between REGAL HOTEL and Ströer SE

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

By analyzing existing cross correlation between REGAL HOTEL INTL and Strer SE Co, you can compare the effects of market volatilities on REGAL HOTEL and Ströer SE 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 REGAL HOTEL with a short position of Ströer SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and Ströer SE.

Diversification Opportunities for REGAL HOTEL and Ströer SE

-0.33

Correlation Coefficient

REGAL HOTEL  Ströer SE

Very good diversification

The 3 months correlation between REGAL and Ströer is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ströer SE and REGAL 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 REGAL HOTEL INTL are associated (or correlated) with Ströer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ströer SE has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and Ströer SE go up and down completely randomly.

Pair Corralation between REGAL HOTEL and Ströer SE

Assuming the 90 days trading horizon REGAL HOTEL INTL is expected to under-perform the Ströer SE. But the stock apears to be less risky and, when comparing its historical volatility, REGAL HOTEL INTL is 1.06 times less risky than Ströer SE. The stock trades about -0.16 of its potential returns per unit of risk. The Strer SE Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,624  in Strer SE Co on December 22, 2024 and sell it today you would earn a total of  1,106  from holding Strer SE Co or generate 23.92% return on investment over 90 days.

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

REGAL HOTEL INTL  vs.  Strer SE Co

REGAL HOTEL INTL

Risk-Adjusted Performance

Very Weak

Over the last 90 days REGAL HOTEL INTL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ströer SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Strer SE Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Ströer SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REGAL HOTEL and Ströer SE

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

The idea behind REGAL HOTEL INTL and Strer SE Co 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.