Correlation Between Telecom Argentina and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Hyatt 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 Telecom Argentina and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina SA and Hyatt Hotels, you can compare the effects of market volatilities on Telecom Argentina and Hyatt 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 Telecom Argentina with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Hyatt Hotels.
Diversification Opportunities for Telecom Argentina and Hyatt Hotels
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telecom and Hyatt is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Telecom Argentina 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 Telecom Argentina SA are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Telecom Argentina and Hyatt Hotels
Assuming the 90 days horizon Telecom Argentina SA is expected to generate 3.04 times more return on investment than Hyatt Hotels. However, Telecom Argentina is 3.04 times more volatile than Hyatt Hotels. It trades about 0.26 of its potential returns per unit of risk. Hyatt Hotels is currently generating about 0.23 per unit of risk. If you would invest 842.00 in Telecom Argentina SA on October 6, 2024 and sell it today you would earn a total of 488.00 from holding Telecom Argentina SA or generate 57.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Telecom Argentina SA vs. Hyatt Hotels
Performance |
Timeline |
Telecom Argentina |
Hyatt Hotels |
Telecom Argentina and Hyatt Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telecom Argentina and Hyatt Hotels
The main advantage of trading using opposite Telecom Argentina and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Hyatt 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.Telecom Argentina vs. Check Point Software | Telecom Argentina vs. Geely Automobile Holdings | Telecom Argentina vs. Alfa Financial Software | Telecom Argentina vs. Guidewire Software |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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