Correlation Between Hyatt Hotels and Gan

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

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

Diversification Opportunities for Hyatt Hotels and Gan

0.44

Correlation Coefficient

Hyatt Hotels  Gan

Very weak diversification

The 3 months correlation between Hyatt and Gan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan and Hyatt 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 Hyatt Hotels are associated (or correlated) with Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Gan go up and down completely randomly.

Pair Corralation between Hyatt Hotels and Gan

Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 1.83 times more return on investment than Gan. However, Hyatt Hotels is 1.83 times more volatile than Gan. It trades about 0.06 of its potential returns per unit of risk. Gan is currently generating about 0.07 per unit of risk. If you would invest  14,746  in Hyatt Hotels on September 4, 2024 and sell it today you would earn a total of  1,058  from holding Hyatt Hotels or generate 7.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hyatt Hotels  vs.  Gan

Hyatt Hotels

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hyatt Hotels are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Hyatt Hotels may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gan

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gan are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Gan is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hyatt Hotels and Gan

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

The idea behind Hyatt Hotels and Gan 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.