Correlation Between VIRGIN WINES and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both VIRGIN WINES and Choice Hotels 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 VIRGIN WINES and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIRGIN WINES UK and Choice Hotels International, you can compare the effects of market volatilities on VIRGIN WINES and Choice Hotels 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 VIRGIN WINES with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRGIN WINES and Choice Hotels.
Diversification Opportunities for VIRGIN WINES and Choice Hotels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VIRGIN and Choice is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIRGIN WINES UK and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and VIRGIN WINES 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 VIRGIN WINES UK are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of VIRGIN WINES i.e., VIRGIN WINES and Choice Hotels go up and down completely randomly.
Pair Corralation between VIRGIN WINES and Choice Hotels
If you would invest 10,447 in Choice Hotels International on August 26, 2024 and sell it today you would earn a total of 3,653 from holding Choice Hotels International or generate 34.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
VIRGIN WINES UK vs. Choice Hotels International
Performance |
| Timeline |
| VIRGIN WINES UK |
| Choice Hotels Intern |
VIRGIN WINES and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIRGIN WINES and Choice Hotels
The main advantage of trading using opposite VIRGIN WINES and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRGIN WINES position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| VIRGIN WINES vs. Altia Oyj | VIRGIN WINES vs. LANSON BCC INH EO | VIRGIN WINES vs. Superior Plus Corp | VIRGIN WINES vs. NMI Holdings |
| Choice Hotels vs. BORR DRILLING NEW | Choice Hotels vs. Pembina Pipeline Corp | Choice Hotels vs. Gamma Communications plc | Choice Hotels vs. Comba Telecom Systems |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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