Correlation Between SBA Communications and HYATT HOTELS
Can any of the company-specific risk be diversified away by investing in both SBA Communications and HYATT 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 SBA Communications and HYATT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and HYATT HOTELS A, you can compare the effects of market volatilities on SBA Communications and HYATT 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 SBA Communications with a short position of HYATT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and HYATT HOTELS.
Diversification Opportunities for SBA Communications and HYATT HOTELS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBA and HYATT is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and SBA Communications 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 SBA Communications Corp are associated (or correlated) with HYATT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of SBA Communications i.e., SBA Communications and HYATT HOTELS go up and down completely randomly.
Pair Corralation between SBA Communications and HYATT HOTELS
Assuming the 90 days trading horizon SBA Communications is expected to generate 6.63 times less return on investment than HYATT HOTELS. But when comparing it to its historical volatility, SBA Communications Corp is 1.05 times less risky than HYATT HOTELS. It trades about 0.05 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 13,107 in HYATT HOTELS A on September 5, 2024 and sell it today you would earn a total of 1,903 from holding HYATT HOTELS A or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBA Communications Corp vs. HYATT HOTELS A
Performance |
| Timeline |
| SBA Communications Corp |
| HYATT HOTELS A |
SBA Communications and HYATT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and HYATT HOTELS
The main advantage of trading using opposite SBA Communications and HYATT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, HYATT 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 HYATT HOTELS will offset losses from the drop in HYATT HOTELS's long position.| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
| HYATT HOTELS vs. TOTAL GABON | HYATT HOTELS vs. Walgreens Boots Alliance | HYATT HOTELS vs. Peak Resources Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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