Correlation Between Covivio Hotels and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Covivio Hotels and Reworld Media 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 Covivio Hotels and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covivio Hotels and Reworld Media, you can compare the effects of market volatilities on Covivio Hotels and Reworld Media 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 Covivio Hotels with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covivio Hotels and Reworld Media.
Diversification Opportunities for Covivio Hotels and Reworld Media
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Covivio and Reworld is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Covivio Hotels and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Covivio 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 Covivio Hotels are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Covivio Hotels i.e., Covivio Hotels and Reworld Media go up and down completely randomly.
Pair Corralation between Covivio Hotels and Reworld Media
Assuming the 90 days trading horizon Covivio Hotels is expected to generate 0.96 times more return on investment than Reworld Media. However, Covivio Hotels is 1.04 times less risky than Reworld Media. It trades about 0.0 of its potential returns per unit of risk. Reworld Media is currently generating about -0.04 per unit of risk. If you would invest 2,400 in Covivio Hotels on September 6, 2025 and sell it today you would lose (60.00) from holding Covivio Hotels or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covivio Hotels vs. Reworld Media
Performance |
| Timeline |
| Covivio Hotels |
| Reworld Media |
Covivio Hotels and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covivio Hotels and Reworld Media
The main advantage of trading using opposite Covivio Hotels and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio Hotels position performs unexpectedly, Reworld Media 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Covivio Hotels vs. WISDOMTREE AGRICULTURE | Covivio Hotels vs. Seche Environnem | Covivio Hotels vs. Fill Up Media | Covivio Hotels vs. Pullup Entertainment Socit |
| Reworld Media vs. Eutelsat Communications SA | Reworld Media vs. X Fab Silicon | Reworld Media vs. WISDOMTREE AGRICULTURE | Reworld Media vs. Hotelim Socit Anonyme |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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