Correlation Between Wyndham Hotels and Moodys
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Moodys 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 Moodys 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 Moodys, you can compare the effects of market volatilities on Wyndham Hotels and Moodys 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 Moodys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Moodys.
Diversification Opportunities for Wyndham Hotels and Moodys
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wyndham and Moodys is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moodys 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 Moodys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moodys has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Moodys go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Moodys
Assuming the 90 days horizon Wyndham Hotels is expected to generate 1.36 times less return on investment than Moodys. In addition to that, Wyndham Hotels is 1.07 times more volatile than Moodys. It trades about 0.06 of its total potential returns per unit of risk. Moodys is currently generating about 0.08 per unit of volatility. If you would invest 27,252 in Moodys on September 5, 2024 and sell it today you would earn a total of 20,298 from holding Moodys or generate 74.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Moodys
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Moodys |
Wyndham Hotels and Moodys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Moodys
The main advantage of trading using opposite Wyndham Hotels and Moodys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Moodys 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 Moodys will offset losses from the drop in Moodys' long position.| Wyndham Hotels vs. DEVRY EDUCATION GRP | Wyndham Hotels vs. American Public Education | Wyndham Hotels vs. Gamma Communications plc | Wyndham Hotels vs. EMBARK EDUCATION LTD |
| Moodys vs. Dalata Hotel Group | Moodys vs. Hyatt Hotels | Moodys vs. Wyndham Hotels Resorts | Moodys vs. DALATA HOTEL |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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