Correlation Between Optima Health and Dalata Hotel

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

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

Diversification Opportunities for Optima Health and Dalata Hotel

0.67

Correlation Coefficient

Optima Health  Dalata Hotel

Poor diversification

The 3 months correlation between Optima and Dalata is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc 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 Optima Health 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 Optima Health plc 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 Optima Health i.e., Optima Health and Dalata Hotel go up and down completely randomly.

Pair Corralation between Optima Health and Dalata Hotel

Assuming the 90 days trading horizon Optima Health is expected to generate 1.76 times less return on investment than Dalata Hotel. In addition to that, Optima Health is 1.06 times more volatile than Dalata Hotel Group. It trades about 0.12 of its total potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.23 per unit of volatility. If you would invest  42,500  in Dalata Hotel Group on April 24, 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	Significant
Accuracy	100.0%
Values	Daily Returns

Optima Health plc  vs.  Dalata Hotel Group

Optima Health plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Optima Health plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Optima Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dalata Hotel Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Dalata Hotel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Optima Health and Dalata Hotel

The main advantage of trading using opposite Optima Health and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health 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 Optima Health plc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.