Correlation Between Wyndham Hotels and ITM Power
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and ITM Power 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 ITM Power 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 ITM Power, you can compare the effects of market volatilities on Wyndham Hotels and ITM Power 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 ITM Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and ITM Power.
Diversification Opportunities for Wyndham Hotels and ITM Power
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wyndham and ITM is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and ITM Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Power 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 ITM Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Power has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and ITM Power go up and down completely randomly.
Pair Corralation between Wyndham Hotels and ITM Power
Assuming the 90 days trading horizon Wyndham Hotels Resorts is expected to generate 0.48 times more return on investment than ITM Power. However, Wyndham Hotels Resorts is 2.07 times less risky than ITM Power. It trades about 0.07 of its potential returns per unit of risk. ITM Power is currently generating about -0.03 per unit of risk. If you would invest 6,828 in Wyndham Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 3,649 from holding Wyndham Hotels Resorts or generate 53.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 82.7% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. ITM Power
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| ITM Power |
Wyndham Hotels and ITM Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and ITM Power
The main advantage of trading using opposite Wyndham Hotels and ITM Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, ITM Power 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 ITM Power will offset losses from the drop in ITM Power'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 |
| ITM Power vs. Bytes Technology | ITM Power vs. Melia Hotels | ITM Power vs. Sabien Technology Group | ITM Power vs. Wyndham Hotels Resorts |
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
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |