Correlation Between FibraHotel and Hoteles City
Can any of the company-specific risk be diversified away by investing in both FibraHotel and Hoteles City 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 FibraHotel and Hoteles City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Hoteles City Express, you can compare the effects of market volatilities on FibraHotel and Hoteles City 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 FibraHotel with a short position of Hoteles City. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Hoteles City.
Diversification Opportunities for FibraHotel and Hoteles City
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FibraHotel and Hoteles is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Hoteles City Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoteles City Express and FibraHotel 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 FibraHotel are associated (or correlated) with Hoteles City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoteles City Express has no effect on the direction of FibraHotel i.e., FibraHotel and Hoteles City go up and down completely randomly.
Pair Corralation between FibraHotel and Hoteles City
Assuming the 90 days trading horizon FibraHotel is expected to generate 0.82 times more return on investment than Hoteles City. However, FibraHotel is 1.22 times less risky than Hoteles City. It trades about 0.02 of its potential returns per unit of risk. Hoteles City Express is currently generating about 0.01 per unit of risk. If you would invest 815.00 in FibraHotel on February 13, 2024 and sell it today you would earn a total of 110.00 from holding FibraHotel or generate 13.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
FibraHotel vs. Hoteles City Express
Performance |
Timeline |
FibraHotel |
Hoteles City Express |
FibraHotel and Hoteles City Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FibraHotel and Hoteles City
The main advantage of trading using opposite FibraHotel and Hoteles City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel position performs unexpectedly, Hoteles City 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 Hoteles City will offset losses from the drop in Hoteles City's long position.FibraHotel vs. Lloyds Banking Group | FibraHotel vs. Apple Inc | FibraHotel vs. Microsoft | FibraHotel vs. Alphabet Inc |
Hoteles City vs. Grupo Elektra SAB | Hoteles City vs. Southern Copper | Hoteles City vs. Grupo Aeroportuario del | Hoteles City vs. Corporativo Fragua SAB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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