Correlation Between Wyndham Hotels and Bellevue Healthcare
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Bellevue Healthcare 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 Bellevue Healthcare 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 Bellevue Healthcare Trust, you can compare the effects of market volatilities on Wyndham Hotels and Bellevue Healthcare 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 Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Bellevue Healthcare.
Diversification Opportunities for Wyndham Hotels and Bellevue Healthcare
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wyndham and Bellevue is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust 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 Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Bellevue Healthcare go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Bellevue Healthcare
Assuming the 90 days trading horizon Wyndham Hotels Resorts is expected to generate 0.69 times more return on investment than Bellevue Healthcare. However, Wyndham Hotels Resorts is 1.45 times less risky than Bellevue Healthcare. It trades about 0.31 of its potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about 0.05 per unit of risk. If you would invest 9,765 in Wyndham Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 712.00 from holding Wyndham Hotels Resorts or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Bellevue Healthcare Trust
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Bellevue Healthcare Trust |
Wyndham Hotels and Bellevue Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Bellevue Healthcare
The main advantage of trading using opposite Wyndham Hotels and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Bellevue Healthcare 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 Bellevue Healthcare will offset losses from the drop in Bellevue Healthcare's long position.| Wyndham Hotels vs. DFS Furniture PLC | Wyndham Hotels vs. Nordic Semiconductor ASA | Wyndham Hotels vs. Take Two Interactive Software | Wyndham Hotels vs. Beazer Homes USA |
| Bellevue Healthcare vs. Air Products Chemicals | Bellevue Healthcare vs. Cars Inc | Bellevue Healthcare vs. Host Hotels Resorts | Bellevue Healthcare vs. Synthomer plc |
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..
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