Correlation Between Industria and Millenium Hotels

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

By analyzing existing cross correlation between Industria de Diseno and Millenium Hotels Real, you can compare the effects of market volatilities on Industria and Millenium Hotels 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 Industria with a short position of Millenium Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Millenium Hotels.

Diversification Opportunities for Industria and Millenium Hotels

-0.9

Correlation Coefficient

Industria  Millenium Hotels

Pay attention - limited upside

The 3 months correlation between Industria and Millenium is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Millenium Hotels Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millenium Hotels Real and Industria 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 Industria de Diseno are associated (or correlated) with Millenium Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millenium Hotels Real has no effect on the direction of Industria i.e., Industria and Millenium Hotels go up and down completely randomly.

Pair Corralation between Industria and Millenium Hotels

Assuming the 90 days trading horizon Industria de Diseno is expected to under-perform the Millenium Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Industria de Diseno is 2.3 times less risky than Millenium Hotels. The stock trades about -0.12 of its potential returns per unit of risk. The Millenium Hotels Real is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  228.00  in Millenium Hotels Real on April 22, 2025 and sell it today you would earn a total of  120.00  from holding Millenium Hotels Real or generate 52.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Industria de Diseno  vs.  Millenium Hotels Real

Industria de Diseno

Risk-Adjusted Performance

Very Weak

Over the last 90 days Industria de Diseno has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Millenium Hotels Real

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Millenium Hotels Real are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Millenium Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Industria and Millenium Hotels

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

The idea behind Industria de Diseno and Millenium Hotels Real 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.