Correlation Between HOTELEST and NEW MAURITIUS

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

By analyzing existing cross correlation between HOTELEST LTD and NEW MAURITIUS HOTELS, you can compare the effects of market volatilities on HOTELEST and NEW MAURITIUS 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 HOTELEST with a short position of NEW MAURITIUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOTELEST and NEW MAURITIUS.

Diversification Opportunities for HOTELEST and NEW MAURITIUS

0.39

Correlation Coefficient

HOTELEST  NEW MAURITIUS

Weak diversification

The 3 months correlation between HOTELEST and NEW is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HOTELEST LTD and NEW MAURITIUS HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MAURITIUS HOTELS and HOTELEST 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 HOTELEST LTD are associated (or correlated) with NEW MAURITIUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MAURITIUS HOTELS has no effect on the direction of HOTELEST i.e., HOTELEST and NEW MAURITIUS go up and down completely randomly.

Pair Corralation between HOTELEST and NEW MAURITIUS

Assuming the 90 days trading horizon HOTELEST LTD is expected to under-perform the NEW MAURITIUS. In addition to that, HOTELEST is 1.19 times more volatile than NEW MAURITIUS HOTELS. It trades about -0.14 of its total potential returns per unit of risk. NEW MAURITIUS HOTELS is currently generating about -0.01 per unit of volatility. If you would invest  1,320  in NEW MAURITIUS HOTELS on April 24, 2025 and sell it today you would lose (20.00) from holding NEW MAURITIUS HOTELS or give up 1.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

HOTELEST LTD  vs.  NEW MAURITIUS HOTELS

HOTELEST LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days HOTELEST LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NEW MAURITIUS HOTELS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEW MAURITIUS HOTELS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, NEW MAURITIUS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HOTELEST and NEW MAURITIUS

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

The idea behind HOTELEST LTD and NEW MAURITIUS HOTELS 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.