Correlation Between Moneta Gold and American Hotel

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

By analyzing existing cross correlation between Moneta Gold and American Hotel Income, you can compare the effects of market volatilities on Moneta Gold and American 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 Moneta Gold with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moneta Gold and American Hotel.

Diversification Opportunities for Moneta Gold and American Hotel

-0.78

Correlation Coefficient

Moneta Gold  American Hotel

Pay attention - limited upside

The 3 months correlation between Moneta and American is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Moneta Gold and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Moneta Gold 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 Moneta Gold are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Moneta Gold i.e., Moneta Gold and American Hotel go up and down completely randomly.

Pair Corralation between Moneta Gold and American Hotel

Assuming the 90 days horizon Moneta Gold is expected to under-perform the American Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Moneta Gold is 7.73 times less risky than American Hotel. The stock trades about -0.35 of its potential returns per unit of risk. The American Hotel Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  46.00  in American Hotel Income on February 5, 2024 and sell it today you would earn a total of  2.00  from holding American Hotel Income or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	22.73%
Values	Daily Returns

Moneta Gold  vs.  American Hotel Income

Moneta Gold

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Moneta Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Moneta Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

American Hotel Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Hotel Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Moneta Gold and American Hotel

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

The idea behind Moneta Gold and American Hotel Income 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 Transaction History module to view history of all your transactions and understand their impact on performance.