Correlation Between BRAEMAR HOTELS and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both BRAEMAR HOTELS and DFS Furniture 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 BRAEMAR HOTELS and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRAEMAR HOTELS RES and DFS Furniture PLC, you can compare the effects of market volatilities on BRAEMAR HOTELS and DFS Furniture 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 BRAEMAR HOTELS with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRAEMAR HOTELS and DFS Furniture.
Diversification Opportunities for BRAEMAR HOTELS and DFS Furniture
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BRAEMAR and DFS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BRAEMAR HOTELS RES and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC and BRAEMAR 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 BRAEMAR HOTELS RES are associated (or correlated) with DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of BRAEMAR HOTELS i.e., BRAEMAR HOTELS and DFS Furniture go up and down completely randomly.
Pair Corralation between BRAEMAR HOTELS and DFS Furniture
Assuming the 90 days horizon BRAEMAR HOTELS RES is expected to generate 3.36 times more return on investment than DFS Furniture. However, BRAEMAR HOTELS is 3.36 times more volatile than DFS Furniture PLC. It trades about 0.31 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.12 per unit of risk. If you would invest 185.00 in BRAEMAR HOTELS RES on February 1, 2024 and sell it today you would earn a total of 71.00 from holding BRAEMAR HOTELS RES or generate 38.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BRAEMAR HOTELS RES vs. DFS Furniture PLC
Performance |
Timeline |
BRAEMAR HOTELS RES |
DFS Furniture PLC |
BRAEMAR HOTELS and DFS Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BRAEMAR HOTELS and DFS Furniture
The main advantage of trading using opposite BRAEMAR HOTELS and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRAEMAR HOTELS position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.BRAEMAR HOTELS vs. Superior Plus Corp | BRAEMAR HOTELS vs. Origin Agritech | BRAEMAR HOTELS vs. Identiv | BRAEMAR HOTELS vs. INTUITIVE SURGICAL |
DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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