Correlation Between Wyndham Hotels and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Thor Mining 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 Thor Mining 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 Thor Mining PLC, you can compare the effects of market volatilities on Wyndham Hotels and Thor Mining 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 Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Thor Mining.
Diversification Opportunities for Wyndham Hotels and Thor Mining
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wyndham and Thor is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC 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 Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Thor Mining go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Thor Mining
Assuming the 90 days trading horizon Wyndham Hotels Resorts is expected to generate 0.39 times more return on investment than Thor Mining. However, Wyndham Hotels Resorts is 2.54 times less risky than Thor Mining. It trades about 0.05 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.04 per unit of risk. If you would invest 7,346 in Wyndham Hotels Resorts on October 16, 2024 and sell it today you would earn a total of 2,636 from holding Wyndham Hotels Resorts or generate 35.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.74% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Thor Mining PLC
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Thor Mining PLC |
Wyndham Hotels and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Thor Mining
The main advantage of trading using opposite Wyndham Hotels and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| Wyndham Hotels vs. Cembra Money Bank | Wyndham Hotels vs. Sparebanken Vest | Wyndham Hotels vs. Sydbank | Wyndham Hotels vs. JD Sports Fashion |
| Thor Mining vs. Wyndham Hotels Resorts | Thor Mining vs. Sovereign Metals | Thor Mining vs. Capital Metals PLC | Thor Mining vs. Gear4music 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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