Correlation Between SBM Offshore and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both SBM Offshore 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 SBM Offshore and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM Offshore NV and Wyndham Hotels Resorts, you can compare the effects of market volatilities on SBM Offshore 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 SBM Offshore with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Wyndham Hotels.
Diversification Opportunities for SBM Offshore and Wyndham Hotels
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBM and Wyndham is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV 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 SBM Offshore 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 SBM Offshore NV 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 SBM Offshore i.e., SBM Offshore and Wyndham Hotels go up and down completely randomly.
Pair Corralation between SBM Offshore and Wyndham Hotels
Assuming the 90 days trading horizon SBM Offshore is expected to generate 1.52 times less return on investment than Wyndham Hotels. In addition to that, SBM Offshore is 1.5 times more volatile than Wyndham Hotels Resorts. It trades about 0.15 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.33 per unit of volatility. If you would invest 8,902 in Wyndham Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 930.00 from holding Wyndham Hotels Resorts or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| SBM Offshore NV |
| Wyndham Hotels Resorts |
SBM Offshore and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Wyndham Hotels
The main advantage of trading using opposite SBM Offshore and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore 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.| SBM Offshore vs. Zoom Video Communications | SBM Offshore vs. Enbridge | SBM Offshore vs. Endo International PLC | SBM Offshore vs. Diversified Energy |
| Wyndham Hotels vs. Samsung Electronics Co | Wyndham Hotels vs. Samsung Electronics Co | Wyndham Hotels vs. Hyundai Motor | Wyndham Hotels vs. Toyota Motor Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |