Correlation Between Wyndham Hotels and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Pernod Ricard 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 Pernod Ricard 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 Pernod Ricard SA, you can compare the effects of market volatilities on Wyndham Hotels and Pernod Ricard 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 Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Pernod Ricard.
Diversification Opportunities for Wyndham Hotels and Pernod Ricard
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wyndham and Pernod is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA 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 Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Pernod Ricard go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Pernod Ricard
Assuming the 90 days horizon Wyndham Hotels Resorts is expected to generate 0.47 times more return on investment than Pernod Ricard. However, Wyndham Hotels Resorts is 2.14 times less risky than Pernod Ricard. It trades about 0.17 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about 0.05 per unit of risk. If you would invest 9,650 in Wyndham Hotels Resorts on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Wyndham Hotels Resorts or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Pernod Ricard SA
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Pernod Ricard SA |
Wyndham Hotels and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Pernod Ricard
The main advantage of trading using opposite Wyndham Hotels and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard's long position.| Wyndham Hotels vs. Teradata Corp | Wyndham Hotels vs. PLAYTIKA HOLDING DL 01 | Wyndham Hotels vs. SILVER BULLET DATA | Wyndham Hotels vs. DICKER DATA LTD |
| Pernod Ricard vs. UNIQA INSURANCE GR | Pernod Ricard vs. AIR LIQUIDE ADR | Pernod Ricard vs. Norwegian Air Shuttle | Pernod Ricard vs. SEALED AIR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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