Correlation Between Samhi Hotels and ACUTAAS CHEMICALS

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

By analyzing existing cross correlation between Samhi Hotels Limited and ACUTAAS CHEMICALS LTD, you can compare the effects of market volatilities on Samhi Hotels and ACUTAAS CHEMICALS 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 Samhi Hotels with a short position of ACUTAAS CHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhi Hotels and ACUTAAS CHEMICALS.

Diversification Opportunities for Samhi Hotels and ACUTAAS CHEMICALS

-0.63

Correlation Coefficient

Samhi Hotels  ACUTAAS CHEMICALS

Excellent diversification

The 3 months correlation between Samhi and ACUTAAS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samhi Hotels Limited and ACUTAAS CHEMICALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACUTAAS CHEMICALS LTD and Samhi Hotels 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 Samhi Hotels Limited are associated (or correlated) with ACUTAAS CHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACUTAAS CHEMICALS LTD has no effect on the direction of Samhi Hotels i.e., Samhi Hotels and ACUTAAS CHEMICALS go up and down completely randomly.

Pair Corralation between Samhi Hotels and ACUTAAS CHEMICALS

Assuming the 90 days trading horizon Samhi Hotels Limited is expected to generate 1.57 times more return on investment than ACUTAAS CHEMICALS. However, Samhi Hotels is 1.57 times more volatile than ACUTAAS CHEMICALS LTD. It trades about 0.21 of its potential returns per unit of risk. ACUTAAS CHEMICALS LTD is currently generating about 0.12 per unit of risk. If you would invest  17,620  in Samhi Hotels Limited on April 22, 2025 and sell it today you would earn a total of  6,962  from holding Samhi Hotels Limited or generate 39.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	56.25%
Values	Daily Returns

Samhi Hotels Limited  vs.  ACUTAAS CHEMICALS LTD

Samhi Hotels Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samhi Hotels Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Samhi Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

ACUTAAS CHEMICALS LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ACUTAAS CHEMICALS LTD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ACUTAAS CHEMICALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samhi Hotels and ACUTAAS CHEMICALS

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

The idea behind Samhi Hotels Limited and ACUTAAS CHEMICALS LTD 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.