Correlation Between COFCO Joycome and Hyatt Hotels

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

By analyzing existing cross correlation between COFCO Joycome Foods and Hyatt Hotels, you can compare the effects of market volatilities on COFCO Joycome and Hyatt Hotels 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 COFCO Joycome with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Hyatt Hotels.

Diversification Opportunities for COFCO Joycome and Hyatt Hotels

0.38

Correlation Coefficient

COFCO Joycome  Hyatt Hotels

Weak diversification

The 3 months correlation between COFCO and Hyatt is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Hyatt Hotels go up and down completely randomly.

Pair Corralation between COFCO Joycome and Hyatt Hotels

Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Hyatt Hotels. In addition to that, COFCO Joycome is 1.99 times more volatile than Hyatt Hotels. It trades about 0.0 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.06 per unit of volatility. If you would invest  9,245  in Hyatt Hotels on September 5, 2024 and sell it today you would earn a total of  5,570  from holding Hyatt Hotels or generate 60.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

COFCO Joycome Foods  vs.  Hyatt Hotels

COFCO Joycome Foods

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COFCO Joycome Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COFCO Joycome may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hyatt Hotels

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hyatt Hotels are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hyatt Hotels may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with COFCO Joycome and Hyatt Hotels

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

The idea behind COFCO Joycome Foods and Hyatt Hotels 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..