Correlation Between COPLAND ROAD and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both COPLAND ROAD 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 COPLAND ROAD and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COPLAND ROAD CAPITAL and Choice Hotels International, you can compare the effects of market volatilities on COPLAND ROAD 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 COPLAND ROAD with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of COPLAND ROAD and Choice Hotels.
Diversification Opportunities for COPLAND ROAD and Choice Hotels
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between COPLAND and Choice is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding COPLAND ROAD CAPITAL 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 COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 COPLAND ROAD i.e., COPLAND ROAD and Choice Hotels go up and down completely randomly.
Pair Corralation between COPLAND ROAD and Choice Hotels
Assuming the 90 days horizon COPLAND ROAD CAPITAL is expected to generate 2.74 times more return on investment than Choice Hotels. However, COPLAND ROAD is 2.74 times more volatile than Choice Hotels International. It trades about 0.19 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.11 per unit of risk. If you would invest 4,265 in COPLAND ROAD CAPITAL on October 11, 2024 and sell it today you would earn a total of 490.00 from holding COPLAND ROAD CAPITAL or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COPLAND ROAD CAPITAL vs. Choice Hotels International
Performance |
| Timeline |
| COPLAND ROAD CAPITAL |
| Choice Hotels Intern |
COPLAND ROAD and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COPLAND ROAD and Choice Hotels
The main advantage of trading using opposite COPLAND ROAD and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPLAND ROAD 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.| COPLAND ROAD vs. North American Construction | COPLAND ROAD vs. AGRICULTBK HADR25 YC | COPLAND ROAD vs. Cleanaway Waste Management | COPLAND ROAD vs. Sterling Construction |
| Choice Hotels vs. SEI INVESTMENTS | Choice Hotels vs. Japan Asia Investment | Choice Hotels vs. Apollo Investment Corp | Choice Hotels vs. SLR Investment Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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