Correlation Between Hyatt Hotels and AIB Group
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and AIB Group 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 AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and AIB Group plc, you can compare the effects of market volatilities on Hyatt Hotels and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and AIB Group.
Diversification Opportunities for Hyatt Hotels and AIB Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyatt and AIB is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and AIB Group go up and down completely randomly.
Pair Corralation between Hyatt Hotels and AIB Group
Assuming the 90 days trading horizon Hyatt Hotels is expected to generate 0.67 times more return on investment than AIB Group. However, Hyatt Hotels is 1.48 times less risky than AIB Group. It trades about 0.29 of its potential returns per unit of risk. AIB Group plc is currently generating about 0.0 per unit of risk. If you would invest 13,316 in Hyatt Hotels on September 4, 2024 and sell it today you would earn a total of 1,409 from holding Hyatt Hotels or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hyatt Hotels vs. AIB Group plc
Performance |
| Timeline |
| Hyatt Hotels |
| AIB Group plc |
Hyatt Hotels and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and AIB Group
The main advantage of trading using opposite Hyatt Hotels and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.The idea behind Hyatt Hotels and AIB Group plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AIB Group vs. Tower One Wireless | AIB Group vs. NURAN WIRELESS INC | AIB Group vs. REVO INSURANCE SPA | AIB Group vs. Infrastrutture Wireless Italiane |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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