Correlation Between Nasdaq and MARRIOTT
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By analyzing existing cross correlation between Nasdaq Inc and MARRIOTT INTERNATIONAL INC, you can compare the effects of market volatilities on Nasdaq and MARRIOTT 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 Nasdaq with a short position of MARRIOTT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and MARRIOTT.
Diversification Opportunities for Nasdaq and MARRIOTT
Good diversification
The 3 months correlation between Nasdaq and MARRIOTT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and MARRIOTT INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTERNATIONAL and Nasdaq 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 Nasdaq Inc are associated (or correlated) with MARRIOTT. 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 Nasdaq i.e., Nasdaq and MARRIOTT go up and down completely randomly.
Pair Corralation between Nasdaq and MARRIOTT
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 7.5 times more return on investment than MARRIOTT. However, Nasdaq is 7.5 times more volatile than MARRIOTT INTERNATIONAL INC. It trades about 0.09 of its potential returns per unit of risk. MARRIOTT INTERNATIONAL INC is currently generating about -0.02 per unit of risk. If you would invest 7,345 in Nasdaq Inc on September 24, 2024 and sell it today you would earn a total of 425.00 from holding Nasdaq Inc or generate 5.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Nasdaq Inc vs. MARRIOTT INTERNATIONAL INC
Performance |
Timeline |
Nasdaq Inc |
MARRIOTT INTERNATIONAL |
Nasdaq and MARRIOTT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq and MARRIOTT
The main advantage of trading using opposite Nasdaq and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, MARRIOTT 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 will offset losses from the drop in MARRIOTT's long position.The idea behind Nasdaq Inc and MARRIOTT INTERNATIONAL INC 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.MARRIOTT vs. Nuvalent | MARRIOTT vs. Evertz Technologies Limited | MARRIOTT vs. 17 Education Technology | MARRIOTT vs. Asure Software |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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