Correlation Between BROADPEAK and Dalata Hotel

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

By analyzing existing cross correlation between BROADPEAK SA EO and Dalata Hotel Group, you can compare the effects of market volatilities on BROADPEAK and Dalata 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 BROADPEAK with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADPEAK and Dalata Hotel.

Diversification Opportunities for BROADPEAK and Dalata Hotel

0.53

Correlation Coefficient

BROADPEAK  Dalata Hotel

Very weak diversification

The 3 months correlation between BROADPEAK and Dalata is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BROADPEAK SA EO and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and BROADPEAK 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 BROADPEAK SA EO are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of BROADPEAK i.e., BROADPEAK and Dalata Hotel go up and down completely randomly.

Pair Corralation between BROADPEAK and Dalata Hotel

Assuming the 90 days horizon BROADPEAK is expected to generate 2.45 times less return on investment than Dalata Hotel. In addition to that, BROADPEAK is 1.72 times more volatile than Dalata Hotel Group. It trades about 0.04 of its total potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.16 per unit of volatility. If you would invest  526.00  in Dalata Hotel Group on April 25, 2025 and sell it today you would earn a total of  109.00  from holding Dalata Hotel Group or generate 20.72% return on investment over 90 days.

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

BROADPEAK SA EO  vs.  Dalata Hotel Group

BROADPEAK SA EO

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BROADPEAK SA EO are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BROADPEAK may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dalata Hotel Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BROADPEAK and Dalata Hotel

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

The idea behind BROADPEAK SA EO and Dalata Hotel Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.