Correlation Between Samhi Hotels and Max Financial

Can any of the company-specific risk be diversified away by investing in both Samhi Hotels and Max Financial 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 Max Financial 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 Max Financial Services, you can compare the effects of market volatilities on Samhi Hotels and Max Financial 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 Max Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhi Hotels and Max Financial.

Diversification Opportunities for Samhi Hotels and Max Financial

0.84

Correlation Coefficient

Samhi Hotels  Max Financial

Very poor diversification

The 3 months correlation between Samhi and Max is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samhi Hotels Limited and Max Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Max Financial Services 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 Max Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Max Financial Services has no effect on the direction of Samhi Hotels i.e., Samhi Hotels and Max Financial go up and down completely randomly.

Pair Corralation between Samhi Hotels and Max Financial

Assuming the 90 days trading horizon Samhi Hotels Limited is expected to generate 1.86 times more return on investment than Max Financial. However, Samhi Hotels is 1.86 times more volatile than Max Financial Services. It trades about 0.18 of its potential returns per unit of risk. Max Financial Services is currently generating about 0.29 per unit of risk. If you would invest  19,329  in Samhi Hotels Limited on April 24, 2025 and sell it today you would earn a total of  5,464  from holding Samhi Hotels Limited or generate 28.27% return on investment over 90 days.

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

Samhi Hotels Limited  vs.  Max Financial Services

Samhi Hotels Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samhi Hotels Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, Samhi Hotels displayed solid returns over the last few months and may actually be approaching a breakup point.

Max Financial Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Max Financial Services are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Max Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samhi Hotels and Max Financial

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

The idea behind Samhi Hotels Limited and Max Financial Services 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.