Correlation Between Hispanotels Inversiones and Profithol

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

By analyzing existing cross correlation between Hispanotels Inversiones SOCIMI and Profithol SA, you can compare the effects of market volatilities on Hispanotels Inversiones and Profithol 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 Hispanotels Inversiones with a short position of Profithol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hispanotels Inversiones and Profithol.

Diversification Opportunities for Hispanotels Inversiones and Profithol

0.66

Correlation Coefficient

Hispanotels Inversiones  Profithol

Poor diversification

The 3 months correlation between Hispanotels and Profithol is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hispanotels Inversiones SOCIMI and Profithol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profithol SA and Hispanotels Inversiones 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 Hispanotels Inversiones SOCIMI are associated (or correlated) with Profithol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profithol SA has no effect on the direction of Hispanotels Inversiones i.e., Hispanotels Inversiones and Profithol go up and down completely randomly.

Pair Corralation between Hispanotels Inversiones and Profithol

Assuming the 90 days trading horizon Hispanotels Inversiones is expected to generate 5.13 times less return on investment than Profithol. But when comparing it to its historical volatility, Hispanotels Inversiones SOCIMI is 9.17 times less risky than Profithol. It trades about 0.19 of its potential returns per unit of risk. Profithol SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Profithol SA on September 14, 2024 and sell it today you would earn a total of  20.00  from holding Profithol SA or generate 55.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Hispanotels Inversiones SOCIMI  vs.  Profithol SA

Hispanotels Inversiones

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hispanotels Inversiones SOCIMI are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Hispanotels Inversiones exhibited solid returns over the last few months and may actually be approaching a breakup point.

Profithol SA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Profithol SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Profithol exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hispanotels Inversiones and Profithol

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

The idea behind Hispanotels Inversiones SOCIMI and Profithol SA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.