Correlation Between TAL Education and MHP Hotel
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By analyzing existing cross correlation between TAL Education Group and MHP Hotel AG, you can compare the effects of market volatilities on TAL Education and MHP Hotel 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 TAL Education with a short position of MHP Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and MHP Hotel.
Diversification Opportunities for TAL Education and MHP Hotel
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TAL and MHP is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group and MHP Hotel AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP Hotel AG and TAL Education 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 TAL Education Group are associated (or correlated) with MHP Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP Hotel AG has no effect on the direction of TAL Education i.e., TAL Education and MHP Hotel go up and down completely randomly.
Pair Corralation between TAL Education and MHP Hotel
Assuming the 90 days trading horizon TAL Education is expected to generate 9.36 times less return on investment than MHP Hotel. In addition to that, TAL Education is 1.02 times more volatile than MHP Hotel AG. It trades about 0.01 of its total potential returns per unit of risk. MHP Hotel AG is currently generating about 0.05 per unit of volatility. If you would invest 115.00 in MHP Hotel AG on September 11, 2024 and sell it today you would earn a total of 3.00 from holding MHP Hotel AG or generate 2.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TAL Education Group vs. MHP Hotel AG
Performance |
Timeline |
TAL Education Group |
MHP Hotel AG |
TAL Education and MHP Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TAL Education and MHP Hotel
The main advantage of trading using opposite TAL Education and MHP Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education position performs unexpectedly, MHP Hotel 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 MHP Hotel will offset losses from the drop in MHP Hotel's long position.TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc | TAL Education vs. Apple Inc |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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