Correlation Between CN MODERN and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both CN MODERN 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 CN MODERN and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and Wyndham Hotels Resorts, you can compare the effects of market volatilities on CN MODERN 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 CN MODERN with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Wyndham Hotels.
Diversification Opportunities for CN MODERN and Wyndham Hotels
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 07M and Wyndham is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY 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 CN MODERN 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 CN MODERN DAIRY 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 CN MODERN i.e., CN MODERN and Wyndham Hotels go up and down completely randomly.
Pair Corralation between CN MODERN and Wyndham Hotels
Assuming the 90 days trading horizon CN MODERN is expected to generate 2.98 times less return on investment than Wyndham Hotels. In addition to that, CN MODERN is 2.61 times more volatile than Wyndham Hotels Resorts. It trades about 0.03 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.22 per unit of volatility. If you would invest 8,318 in Wyndham Hotels Resorts on November 6, 2024 and sell it today you would earn a total of 1,682 from holding Wyndham Hotels Resorts or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| CN MODERN DAIRY |
| Wyndham Hotels Resorts |
CN MODERN and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Wyndham Hotels
The main advantage of trading using opposite CN MODERN and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN 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.| CN MODERN vs. AEON METALS LTD | CN MODERN vs. ADRIATIC METALS LS 013355 | CN MODERN vs. ARDAGH METAL PACDL 0001 | CN MODERN vs. CORNISH METALS INC |
| Wyndham Hotels vs. ONWARD MEDICAL BV | Wyndham Hotels vs. Genertec Universal Medical | Wyndham Hotels vs. REVO INSURANCE SPA | Wyndham Hotels vs. TFS FINANCIAL |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |