Correlation Between Wyndham Hotels and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on Wyndham Hotels and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and TRADEGATE.
Diversification Opportunities for Wyndham Hotels and TRADEGATE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wyndham and TRADEGATE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and TRADEGATE go up and down completely randomly.
Pair Corralation between Wyndham Hotels and TRADEGATE
Assuming the 90 days horizon Wyndham Hotels Resorts is expected to generate 1.39 times more return on investment than TRADEGATE. However, Wyndham Hotels is 1.39 times more volatile than TRADEGATE. It trades about 0.07 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.05 per unit of risk. If you would invest 6,444 in Wyndham Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 2,706 from holding Wyndham Hotels Resorts or generate 41.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. TRADEGATE
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| TRADEGATE |
Wyndham Hotels and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and TRADEGATE
The main advantage of trading using opposite Wyndham Hotels and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.The idea behind Wyndham Hotels Resorts and TRADEGATE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TRADEGATE vs. Summit Hotel Properties | TRADEGATE vs. Wyndham Hotels Resorts | TRADEGATE vs. FARO Technologies | TRADEGATE vs. Hyatt Hotels |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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