Correlation Between Wyndham Hotels and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and AcadeMedia 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 Wyndham Hotels and AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wyndham Hotels Resorts and AcadeMedia AB, you can compare the effects of market volatilities on Wyndham Hotels and AcadeMedia 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 Wyndham Hotels with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and AcadeMedia.
Diversification Opportunities for Wyndham Hotels and AcadeMedia
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wyndham and AcadeMedia is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and Wyndham Hotels 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 Wyndham Hotels Resorts are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and AcadeMedia go up and down completely randomly.
Pair Corralation between Wyndham Hotels and AcadeMedia
Assuming the 90 days trading horizon Wyndham Hotels Resorts is expected to generate 1.32 times more return on investment than AcadeMedia. However, Wyndham Hotels is 1.32 times more volatile than AcadeMedia AB. It trades about 0.28 of its potential returns per unit of risk. AcadeMedia AB is currently generating about -0.14 per unit of risk. If you would invest 8,902 in Wyndham Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 780.00 from holding Wyndham Hotels Resorts or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. AcadeMedia AB
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| AcadeMedia AB |
Wyndham Hotels and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and AcadeMedia
The main advantage of trading using opposite Wyndham Hotels and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.| Wyndham Hotels vs. Samsung Electronics Co | Wyndham Hotels vs. Samsung Electronics Co | Wyndham Hotels vs. Hyundai Motor | Wyndham Hotels vs. Toyota Motor Corp |
| AcadeMedia vs. Blackrock World Mining | AcadeMedia vs. Endeavour Mining Corp | AcadeMedia vs. JLEN Environmental Assets | AcadeMedia vs. Tata Steel Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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