Correlation Between Wyndham Hotels and Apple
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Wyndham Hotels and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Apple.
Diversification Opportunities for Wyndham Hotels and Apple
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wyndham and Apple is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Apple go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Apple
Assuming the 90 days horizon Wyndham Hotels Resorts is expected to generate 1.17 times more return on investment than Apple. However, Wyndham Hotels is 1.17 times more volatile than Apple Inc. It trades about 0.21 of its potential returns per unit of risk. Apple Inc is currently generating about -0.01 per unit of risk. If you would invest 8,367 in Wyndham Hotels Resorts on October 26, 2024 and sell it today you would earn a total of 1,733 from holding Wyndham Hotels Resorts or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Apple Inc
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Apple Inc |
Wyndham Hotels and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Apple
The main advantage of trading using opposite Wyndham Hotels and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Wyndham Hotels vs. STMicroelectronics NV | Wyndham Hotels vs. ARROW ELECTRONICS | Wyndham Hotels vs. ECHO INVESTMENT ZY | Wyndham Hotels vs. ELECTRONIC ARTS |
| Apple vs. BOS BETTER ONLINE | Apple vs. CarsalesCom | Apple vs. FUYO GENERAL LEASE | Apple vs. United Rentals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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