Correlation Between Samhi Hotels and Future Retail

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

By analyzing existing cross correlation between Samhi Hotels Limited and Future Retail Limited, you can compare the effects of market volatilities on Samhi Hotels and Future Retail 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 Samhi Hotels with a short position of Future Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhi Hotels and Future Retail.

Diversification Opportunities for Samhi Hotels and Future Retail

0.0

Correlation Coefficient

Samhi Hotels  Future Retail

Pay attention - limited upside

The 3 months correlation between Samhi and Future is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samhi Hotels Limited and Future Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Retail Limited and Samhi Hotels 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 Samhi Hotels Limited are associated (or correlated) with Future Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Retail Limited has no effect on the direction of Samhi Hotels i.e., Samhi Hotels and Future Retail go up and down completely randomly.

Pair Corralation between Samhi Hotels and Future Retail

Assuming the 90 days trading horizon Samhi Hotels Limited is expected to generate 1.0 times more return on investment than Future Retail. However, Samhi Hotels is 1.0 times more volatile than Future Retail Limited. It trades about 0.04 of its potential returns per unit of risk. Future Retail Limited is currently generating about -0.04 per unit of risk. If you would invest  16,930  in Samhi Hotels Limited on September 14, 2024 and sell it today you would earn a total of  2,800  from holding Samhi Hotels Limited or generate 16.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Samhi Hotels Limited  vs.  Future Retail Limited

Samhi Hotels Limited

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Samhi Hotels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Samhi Hotels is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Future Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Samhi Hotels and Future Retail

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

The idea behind Samhi Hotels Limited and Future Retail Limited 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.