Correlation Between HYATT HOTELS and Old Dominion
Can any of the company-specific risk be diversified away by investing in both HYATT HOTELS and Old Dominion 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 Old Dominion 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 Old Dominion Freight, you can compare the effects of market volatilities on HYATT HOTELS and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYATT HOTELS and Old Dominion.
Diversification Opportunities for HYATT HOTELS and Old Dominion
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HYATT and Old is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HYATT HOTELS A and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of HYATT HOTELS i.e., HYATT HOTELS and Old Dominion go up and down completely randomly.
Pair Corralation between HYATT HOTELS and Old Dominion
Assuming the 90 days trading horizon HYATT HOTELS A is expected to generate 0.82 times more return on investment than Old Dominion. However, HYATT HOTELS A is 1.21 times less risky than Old Dominion. It trades about 0.05 of its potential returns per unit of risk. Old Dominion Freight is currently generating about 0.04 per unit of risk. If you would invest 10,314 in HYATT HOTELS A on September 4, 2024 and sell it today you would earn a total of 4,566 from holding HYATT HOTELS A or generate 44.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
HYATT HOTELS A vs. Old Dominion Freight
Performance |
| Timeline |
| HYATT HOTELS A |
| Old Dominion Freight |
HYATT HOTELS and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYATT HOTELS and Old Dominion
The main advantage of trading using opposite HYATT HOTELS and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYATT HOTELS position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.| HYATT HOTELS vs. TOTAL GABON | HYATT HOTELS vs. Walgreens Boots Alliance | HYATT HOTELS vs. Peak Resources Limited |
| Old Dominion vs. Saia Inc | Old Dominion vs. SCHNEIDER NATLINC CLB | Old Dominion vs. Seino Holdings Co | Old Dominion vs. Fukuyama Transporting Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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