Correlation Between HYATT HOTELS and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both HYATT HOTELS and NH 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on HYATT HOTELS and NH 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYATT HOTELS and NH HOTEL.
Diversification Opportunities for HYATT HOTELS and NH HOTEL
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HYATT and NH5 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding HYATT HOTELS A and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 A are associated (or correlated) with NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of HYATT HOTELS i.e., HYATT HOTELS and NH HOTEL go up and down completely randomly.
Pair Corralation between HYATT HOTELS and NH HOTEL
Assuming the 90 days trading horizon HYATT HOTELS A is expected to generate 0.88 times more return on investment than NH HOTEL. However, HYATT HOTELS A is 1.13 times less risky than NH HOTEL. It trades about 0.04 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about -0.05 per unit of risk. If you would invest 14,525 in HYATT HOTELS A on August 31, 2024 and sell it today you would earn a total of 220.00 from holding HYATT HOTELS A or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYATT HOTELS A vs. NH HOTEL GROUP
Performance |
| Timeline |
| HYATT HOTELS A |
| NH HOTEL GROUP |
HYATT HOTELS and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYATT HOTELS and NH HOTEL
The main advantage of trading using opposite HYATT HOTELS and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYATT HOTELS position performs unexpectedly, NH 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| HYATT HOTELS vs. SIVERS SEMICONDUCTORS AB | HYATT HOTELS vs. Darden Restaurants | HYATT HOTELS vs. Reliance Steel Aluminum | HYATT HOTELS vs. Q2M Managementberatung AG |
| NH HOTEL vs. Take Two Interactive Software | NH HOTEL vs. CyberArk Software | NH HOTEL vs. KINGBOARD CHEMICAL | NH HOTEL vs. ATOSS SOFTWARE |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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