Correlation Between Hyatt Hotels and Tokyu Construction
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and Tokyu Construction 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 Tokyu Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and Tokyu Construction Co, you can compare the effects of market volatilities on Hyatt Hotels and Tokyu Construction 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 Tokyu Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and Tokyu Construction.
Diversification Opportunities for Hyatt Hotels and Tokyu Construction
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyatt and Tokyu is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Tokyu Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu Construction 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 Tokyu Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu Construction has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Tokyu Construction go up and down completely randomly.
Pair Corralation between Hyatt Hotels and Tokyu Construction
Assuming the 90 days trading horizon Hyatt Hotels is expected to generate 1.31 times more return on investment than Tokyu Construction. However, Hyatt Hotels is 1.31 times more volatile than Tokyu Construction Co. It trades about 0.05 of its potential returns per unit of risk. Tokyu Construction Co is currently generating about 0.0 per unit of risk. If you would invest 10,209 in Hyatt Hotels on October 29, 2024 and sell it today you would earn a total of 4,561 from holding Hyatt Hotels or generate 44.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. Tokyu Construction Co
Performance |
| Timeline |
| Hyatt Hotels |
| Tokyu Construction |
Hyatt Hotels and Tokyu Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and Tokyu Construction
The main advantage of trading using opposite Hyatt Hotels and Tokyu Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, Tokyu Construction 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 Tokyu Construction will offset losses from the drop in Tokyu Construction's long position.| Hyatt Hotels vs. Minerals Technologies | Hyatt Hotels vs. Eidesvik Offshore ASA | Hyatt Hotels vs. Molson Coors Beverage | Hyatt Hotels vs. BioNTech SE |
| Tokyu Construction vs. Jacquet Metal Service | Tokyu Construction vs. GREENX METALS LTD | Tokyu Construction vs. NH HOTEL GROUP | Tokyu Construction vs. Ringmetall SE |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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