Correlation Between Wyndham Hotels and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Wyndham Hotels and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Supermarket Income.
Diversification Opportunities for Wyndham Hotels and Supermarket Income
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wyndham and Supermarket is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Supermarket Income go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Supermarket Income
Assuming the 90 days trading horizon Wyndham Hotels Resorts is expected to generate 1.35 times more return on investment than Supermarket Income. However, Wyndham Hotels is 1.35 times more volatile than Supermarket Income REIT. It trades about 0.18 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about 0.01 per unit of risk. If you would invest 7,701 in Wyndham Hotels Resorts on November 28, 2024 and sell it today you would earn a total of 2,896 from holding Wyndham Hotels Resorts or generate 37.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.8% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Supermarket Income REIT
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Supermarket Income REIT |
Wyndham Hotels and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Supermarket Income
The main advantage of trading using opposite Wyndham Hotels and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Wyndham Hotels vs. JB Hunt Transport | Wyndham Hotels vs. Hilton Food Group | Wyndham Hotels vs. Molson Coors Beverage | Wyndham Hotels vs. Clean Power Hydrogen |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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