Correlation Between Mondee Holdings and Marriott International

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

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

Diversification Opportunities for Mondee Holdings and Marriott International

-0.74

Correlation Coefficient

Mondee Holdings  Marriott International

Pay attention - limited upside

The 3 months correlation between Mondee and Marriott is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mondee Holdings and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and Mondee Holdings 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 Mondee Holdings are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Mondee Holdings i.e., Mondee Holdings and Marriott International go up and down completely randomly.

Pair Corralation between Mondee Holdings and Marriott International

Given the investment horizon of 90 days Mondee Holdings is expected to under-perform the Marriott International. In addition to that, Mondee Holdings is 10.62 times more volatile than Marriott International. It trades about -0.32 of its total potential returns per unit of risk. Marriott International is currently generating about 0.25 per unit of volatility. If you would invest  23,194  in Marriott International on September 15, 2024 and sell it today you would earn a total of  5,514  from holding Marriott International or generate 23.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.75%
Values	Daily Returns

Mondee Holdings  vs.  Marriott International

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Marriott International

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marriott International are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Marriott International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mondee Holdings and Marriott International

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

The idea behind Mondee Holdings and Marriott International 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .