Correlation Between Wyndham Hotels and Entain Plc
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Entain Plc 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 Wyndham Hotels and Entain Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wyndham Hotels Resorts and Entain Plc, you can compare the effects of market volatilities on Wyndham Hotels and Entain Plc 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 Wyndham Hotels with a short position of Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Entain Plc.
Diversification Opportunities for Wyndham Hotels and Entain Plc
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wyndham and Entain is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc and Wyndham 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 Wyndham Hotels Resorts are associated (or correlated) with Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Entain Plc go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Entain Plc
Assuming the 90 days horizon Wyndham Hotels Resorts is expected to generate 0.59 times more return on investment than Entain Plc. However, Wyndham Hotels Resorts is 1.69 times less risky than Entain Plc. It trades about 0.36 of its potential returns per unit of risk. Entain Plc is currently generating about 0.19 per unit of risk. If you would invest 8,900 in Wyndham Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 1,000.00 from holding Wyndham Hotels Resorts or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Entain Plc
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Entain Plc |
Wyndham Hotels and Entain Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Entain Plc
The main advantage of trading using opposite Wyndham Hotels and Entain Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Entain Plc 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 Entain Plc will offset losses from the drop in Entain Plc's long position.| Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. INTERCONT HOTELS | Wyndham Hotels vs. Choice Hotels International |
| Entain Plc vs. Sands China | Entain Plc vs. Superior Plus Corp | Entain Plc vs. SIVERS SEMICONDUCTORS AB | Entain Plc vs. Norsk Hydro ASA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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