Correlation Between Hyatt Hotels and Sun Life
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and Sun Life Financial, you can compare the effects of market volatilities on Hyatt Hotels and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and Sun Life.
Diversification Opportunities for Hyatt Hotels and Sun Life
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyatt and Sun is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Sun Life go up and down completely randomly.
Pair Corralation between Hyatt Hotels and Sun Life
Assuming the 90 days trading horizon Hyatt Hotels is expected to generate 1.89 times less return on investment than Sun Life. In addition to that, Hyatt Hotels is 1.47 times more volatile than Sun Life Financial. It trades about 0.06 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.16 per unit of volatility. If you would invest 5,175 in Sun Life Financial on September 22, 2024 and sell it today you would earn a total of 475.00 from holding Sun Life Financial or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. Sun Life Financial
Performance |
| Timeline |
| Hyatt Hotels |
| Sun Life Financial |
Hyatt Hotels and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and Sun Life
The main advantage of trading using opposite Hyatt Hotels and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Hyatt Hotels vs. Xenia Hotels Resorts | Hyatt Hotels vs. CODERE ONLINE LUX | Hyatt Hotels vs. Dalata Hotel Group | Hyatt Hotels vs. Gruppo Mutuionline SpA |
| Sun Life vs. Berkshire Hathaway | Sun Life vs. Berkshire Hathaway | Sun Life vs. Zurich Insurance Group | Sun Life vs. American International Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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