Correlation Between Hyatt Hotels and REGAL HOTEL
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and REGAL HOTEL 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 REGAL HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and REGAL HOTEL INTL, you can compare the effects of market volatilities on Hyatt Hotels and REGAL HOTEL 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 REGAL HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and REGAL HOTEL.
Diversification Opportunities for Hyatt Hotels and REGAL HOTEL
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyatt and REGAL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and REGAL HOTEL INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL HOTEL INTL 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 REGAL HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL HOTEL INTL has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and REGAL HOTEL go up and down completely randomly.
Pair Corralation between Hyatt Hotels and REGAL HOTEL
Assuming the 90 days trading horizon Hyatt Hotels is expected to under-perform the REGAL HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, Hyatt Hotels is 1.77 times less risky than REGAL HOTEL. The stock trades about -0.15 of its potential returns per unit of risk. The REGAL HOTEL INTL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 28.00 in REGAL HOTEL INTL on October 10, 2024 and sell it today you would earn a total of 1.00 from holding REGAL HOTEL INTL or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. REGAL HOTEL INTL
Performance |
| Timeline |
| Hyatt Hotels |
| REGAL HOTEL INTL |
Hyatt Hotels and REGAL HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and REGAL HOTEL
The main advantage of trading using opposite Hyatt Hotels and REGAL HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, REGAL HOTEL 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 REGAL HOTEL will offset losses from the drop in REGAL HOTEL'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 |
| REGAL HOTEL vs. Insteel Industries | REGAL HOTEL vs. Constellation Software | REGAL HOTEL vs. Unity Software | REGAL HOTEL vs. Magic Software Enterprises |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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