Correlation Between Hyatt Hotels and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and BRAEMAR HOTELS 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 Hyatt Hotels and BRAEMAR HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and BRAEMAR HOTELS RES, you can compare the effects of market volatilities on Hyatt Hotels and BRAEMAR HOTELS 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 Hyatt Hotels with a short position of BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and BRAEMAR HOTELS.
Diversification Opportunities for Hyatt Hotels and BRAEMAR HOTELS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyatt and BRAEMAR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES and Hyatt 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 Hyatt Hotels are associated (or correlated) with BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between Hyatt Hotels and BRAEMAR HOTELS
Assuming the 90 days trading horizon Hyatt Hotels is expected to generate 0.51 times more return on investment than BRAEMAR HOTELS. However, Hyatt Hotels is 1.98 times less risky than BRAEMAR HOTELS. It trades about -0.15 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.19 per unit of risk. If you would invest 15,405 in Hyatt Hotels on October 10, 2024 and sell it today you would lose (720.00) from holding Hyatt Hotels or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| Hyatt Hotels |
| BRAEMAR HOTELS RES |
Hyatt Hotels and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and BRAEMAR HOTELS
The main advantage of trading using opposite Hyatt Hotels and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| Hyatt Hotels vs. Hisense Home Appliances | Hyatt Hotels vs. Taylor Morrison Home | Hyatt Hotels vs. The Home Depot | Hyatt Hotels vs. Focus Home Interactive |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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