Correlation Between Wyndham Hotels and Compugroup Medical
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Compugroup Medical 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 Compugroup Medical 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 Compugroup Medical SE, you can compare the effects of market volatilities on Wyndham Hotels and Compugroup Medical 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 Compugroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Compugroup Medical.
Diversification Opportunities for Wyndham Hotels and Compugroup Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wyndham and Compugroup is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Compugroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugroup Medical 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 Compugroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugroup Medical has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Compugroup Medical go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Compugroup Medical
Assuming the 90 days horizon Wyndham Hotels is expected to generate 1.19 times less return on investment than Compugroup Medical. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.71 times less risky than Compugroup Medical. It trades about 0.35 of its potential returns per unit of risk. Compugroup Medical SE is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,370 in Compugroup Medical SE on September 3, 2024 and sell it today you would earn a total of 216.00 from holding Compugroup Medical SE or generate 15.77% 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. Compugroup Medical SE
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Compugroup Medical |
Wyndham Hotels and Compugroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Compugroup Medical
The main advantage of trading using opposite Wyndham Hotels and Compugroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Compugroup Medical 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 Compugroup Medical will offset losses from the drop in Compugroup Medical's long position.| Wyndham Hotels vs. Salesforce | Wyndham Hotels vs. Cleanaway Waste Management | Wyndham Hotels vs. BII Railway Transportation | Wyndham Hotels vs. BROADSTNET LEADL 00025 |
| Compugroup Medical vs. ATRESMEDIA | Compugroup Medical vs. Corsair Gaming | Compugroup Medical vs. Hollywood Bowl Group | Compugroup Medical vs. RCS MediaGroup SpA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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