Correlation Between Wyndham Hotels and CAIXABANK UNADR
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and CAIXABANK UNADR 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 CAIXABANK UNADR 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 CAIXABANK UNADR 13, you can compare the effects of market volatilities on Wyndham Hotels and CAIXABANK UNADR 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 CAIXABANK UNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and CAIXABANK UNADR.
Diversification Opportunities for Wyndham Hotels and CAIXABANK UNADR
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wyndham and CAIXABANK is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and CAIXABANK UNADR 13 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIXABANK UNADR 13 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 CAIXABANK UNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIXABANK UNADR 13 has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and CAIXABANK UNADR go up and down completely randomly.
Pair Corralation between Wyndham Hotels and CAIXABANK UNADR
Assuming the 90 days horizon Wyndham Hotels is expected to generate 1.31 times less return on investment than CAIXABANK UNADR. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.36 times less risky than CAIXABANK UNADR. It trades about 0.07 of its potential returns per unit of risk. CAIXABANK UNADR 13 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 94.00 in CAIXABANK UNADR 13 on September 12, 2024 and sell it today you would earn a total of 71.00 from holding CAIXABANK UNADR 13 or generate 75.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. CAIXABANK UNADR 13
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| CAIXABANK UNADR 13 |
Wyndham Hotels and CAIXABANK UNADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and CAIXABANK UNADR
The main advantage of trading using opposite Wyndham Hotels and CAIXABANK UNADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, CAIXABANK UNADR 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 CAIXABANK UNADR will offset losses from the drop in CAIXABANK UNADR'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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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