Correlation Between Wyndham Hotels and Eco Oil
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Eco Oil 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 Eco Oil 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 Eco Oil Gas, you can compare the effects of market volatilities on Wyndham Hotels and Eco Oil 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 Eco Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Eco Oil.
Diversification Opportunities for Wyndham Hotels and Eco Oil
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wyndham and Eco is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Eco Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Oil Gas 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 Eco Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Oil Gas has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Eco Oil go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Eco Oil
Assuming the 90 days trading horizon Wyndham Hotels Resorts is expected to generate 0.43 times more return on investment than Eco Oil. However, Wyndham Hotels Resorts is 2.3 times less risky than Eco Oil. It trades about 0.09 of its potential returns per unit of risk. Eco Oil Gas is currently generating about 0.01 per unit of risk. If you would invest 6,682 in Wyndham Hotels Resorts on September 4, 2024 and sell it today you would earn a total of 3,124 from holding Wyndham Hotels Resorts or generate 46.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.27% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Eco Oil Gas
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Eco Oil Gas |
Wyndham Hotels and Eco Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Eco Oil
The main advantage of trading using opposite Wyndham Hotels and Eco Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Eco Oil 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 Eco Oil will offset losses from the drop in Eco Oil'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 |
| Eco Oil vs. Telecom Italia SpA | Eco Oil vs. Fevertree Drinks Plc | Eco Oil vs. Cellnex Telecom SA | Eco Oil vs. Aeorema Communications 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |