Correlation Between Flanigans Enterprises and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Wyndham 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 Flanigans Enterprises and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Flanigans Enterprises and Wyndham 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 Flanigans Enterprises with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Wyndham Hotels.
Diversification Opportunities for Flanigans Enterprises and Wyndham Hotels
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flanigans and Wyndham is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and Flanigans Enterprises 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 Flanigans Enterprises are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Wyndham Hotels
Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Wyndham Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Flanigans Enterprises is 1.94 times less risky than Wyndham Hotels. The stock trades about -0.2 of its potential returns per unit of risk. The Wyndham Hotels Resorts is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,927 in Wyndham Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 842.00 from holding Wyndham Hotels Resorts or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Flanigans Enterprises vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Flanigans Enterprises |
| Wyndham Hotels Resorts |
Flanigans Enterprises and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Wyndham Hotels
The main advantage of trading using opposite Flanigans Enterprises and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Wyndham 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
| Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Marriott International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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