Correlation Between HYATT HOTELS-A and China Petroleum
Can any of the company-specific risk be diversified away by investing in both HYATT HOTELS-A and China Petroleum 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-A and China Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYATT HOTELS A and China Petroleum Chemical, you can compare the effects of market volatilities on HYATT HOTELS-A and China Petroleum 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-A with a short position of China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYATT HOTELS-A and China Petroleum.
Diversification Opportunities for HYATT HOTELS-A and China Petroleum
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HYATT and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding HYATT HOTELS A and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical and HYATT HOTELS-A 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 A are associated (or correlated) with China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of HYATT HOTELS-A i.e., HYATT HOTELS-A and China Petroleum go up and down completely randomly.
Pair Corralation between HYATT HOTELS-A and China Petroleum
Assuming the 90 days trading horizon HYATT HOTELS A is expected to under-perform the China Petroleum. In addition to that, HYATT HOTELS-A is 1.93 times more volatile than China Petroleum Chemical. It trades about -0.21 of its total potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.06 per unit of volatility. If you would invest 52.00 in China Petroleum Chemical on December 4, 2024 and sell it today you would lose (1.00) from holding China Petroleum Chemical or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYATT HOTELS A vs. China Petroleum Chemical
Performance |
| Timeline |
| HYATT HOTELS A |
| China Petroleum Chemical |
HYATT HOTELS-A and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYATT HOTELS-A and China Petroleum
The main advantage of trading using opposite HYATT HOTELS-A and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYATT HOTELS-A position performs unexpectedly, China Petroleum 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 China Petroleum will offset losses from the drop in China Petroleum's long position.| HYATT HOTELS-A vs. TRI CHEMICAL LABORATINC | HYATT HOTELS-A vs. Sinopec Shanghai Petrochemical | HYATT HOTELS-A vs. Allegheny Technologies Incorporated | HYATT HOTELS-A vs. CHEMICAL INDUSTRIES |
| China Petroleum vs. Chevron | China Petroleum vs. Chevron | China Petroleum vs. TotalEnergies SE | China Petroleum vs. PetroChina Company Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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