Correlation Between Volkswagen and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Wyndham Hotels.
Diversification Opportunities for Volkswagen and Wyndham Hotels
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and Wyndham is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG 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 Volkswagen 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 Volkswagen AG 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 Volkswagen i.e., Volkswagen and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Volkswagen and Wyndham Hotels
Assuming the 90 days trading horizon Volkswagen AG is expected to under-perform the Wyndham Hotels. In addition to that, Volkswagen is 1.05 times more volatile than Wyndham Hotels Resorts. It trades about -0.07 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.16 per unit of volatility. If you would invest 7,047 in Wyndham Hotels Resorts on October 13, 2024 and sell it today you would earn a total of 2,919 from holding Wyndham Hotels Resorts or generate 41.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
Volkswagen AG vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Volkswagen AG |
| Wyndham Hotels Resorts |
Volkswagen and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Wyndham Hotels
The main advantage of trading using opposite Volkswagen and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.| Volkswagen vs. Atalaya Mining | Volkswagen vs. Seraphim Space Investment | Volkswagen vs. Thor Mining PLC | Volkswagen vs. Nordic Semiconductor ASA |
| Wyndham Hotels vs. Walmart | Wyndham Hotels vs. BYD Co | Wyndham Hotels vs. Volkswagen AG | Wyndham Hotels vs. Volkswagen AG Non Vtg |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |