Correlation Between Sydbank and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Sydbank 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 Sydbank and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sydbank and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Sydbank 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 Sydbank with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank and Wyndham Hotels.
Diversification Opportunities for Sydbank and Wyndham Hotels
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sydbank and Wyndham is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank 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 Sydbank 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 Sydbank 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 Sydbank i.e., Sydbank and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Sydbank and Wyndham Hotels
Assuming the 90 days trading horizon Sydbank is expected to under-perform the Wyndham Hotels. In addition to that, Sydbank is 1.54 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 0.26 per unit of volatility. If you would invest 10,025 in Wyndham Hotels Resorts on October 30, 2024 and sell it today you would earn a total of 491.00 from holding Wyndham Hotels Resorts or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sydbank vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Sydbank |
| Wyndham Hotels Resorts |
Sydbank and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sydbank and Wyndham Hotels
The main advantage of trading using opposite Sydbank and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank 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.| Sydbank vs. Take Two Interactive Software | Sydbank vs. Abingdon Health Plc | Sydbank vs. Cardinal Health | Sydbank vs. Naturhouse Health SA |
| Wyndham Hotels vs. Southwest Airlines Co | Wyndham Hotels vs. Infrastrutture Wireless Italiane | Wyndham Hotels vs. Premier Foods PLC | Wyndham Hotels vs. Molson Coors Beverage |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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