Correlation Between Dalata Hotel and Canadian General
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and Canadian General 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 Dalata Hotel and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and Canadian General Investments, you can compare the effects of market volatilities on Dalata Hotel and Canadian General 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 Dalata Hotel with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Canadian General.
Diversification Opportunities for Dalata Hotel and Canadian General
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dalata and Canadian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and Canadian General go up and down completely randomly.
Pair Corralation between Dalata Hotel and Canadian General
Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 1.6 times more return on investment than Canadian General. However, Dalata Hotel is 1.6 times more volatile than Canadian General Investments. It trades about 0.23 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.33 per unit of risk. If you would invest 42,500 in Dalata Hotel Group on April 23, 2025 and sell it today you would earn a total of 12,000 from holding Dalata Hotel Group or generate 28.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dalata Hotel Group vs. Canadian General Investments
Performance |
Timeline |
Dalata Hotel Group |
Canadian General Inv |
Dalata Hotel and Canadian General Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dalata Hotel and Canadian General
The main advantage of trading using opposite Dalata Hotel and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.Dalata Hotel vs. Xeros Technology Group | Dalata Hotel vs. Arrow Electronics | Dalata Hotel vs. Monster Beverage Corp | Dalata Hotel vs. National Beverage Corp |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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