Correlation Between H World and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both H World and Wyndham 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 H World and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H World Group and Wyndham Hotels Resorts, you can compare the effects of market volatilities on H World and Wyndham 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 H World with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of H World and Wyndham Hotels.
Diversification Opportunities for H World and Wyndham Hotels
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CL4A and Wyndham is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding H World Group and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and H World 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 H World Group are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of H World i.e., H World and Wyndham Hotels go up and down completely randomly.
Pair Corralation between H World and Wyndham Hotels
Assuming the 90 days trading horizon H World Group is expected to under-perform the Wyndham Hotels. But the stock apears to be less risky and, when comparing its historical volatility, H World Group is 1.0 times less risky than Wyndham Hotels. The stock trades about -0.09 of its potential returns per unit of risk. The Wyndham Hotels Resorts is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7,620 in Wyndham Hotels Resorts on September 23, 2024 and sell it today you would earn a total of 1,930 from holding Wyndham Hotels Resorts or generate 25.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
H World Group vs. Wyndham Hotels Resorts
Performance |
Timeline |
H World Group |
Wyndham Hotels Resorts |
H World and Wyndham Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with H World and Wyndham Hotels
The main advantage of trading using opposite H World and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H World position performs unexpectedly, Wyndham 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.H World vs. Marriott International | H World vs. Hilton Worldwide Holdings | H World vs. Hyatt Hotels | H World vs. InterContinental Hotels Group |
Wyndham Hotels vs. WIZZ AIR HLDGUNSPADR4 | Wyndham Hotels vs. PennantPark Investment | Wyndham Hotels vs. SLR Investment Corp | Wyndham Hotels vs. ALTAIR RES 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Commodity Directory Find actively traded commodities issued by global exchanges |