Correlation Between MHP Hotel and Choice Hotels
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By analyzing existing cross correlation between MHP Hotel AG and Choice Hotels International, you can compare the effects of market volatilities on MHP Hotel 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 MHP Hotel with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MHP Hotel and Choice Hotels.
Diversification Opportunities for MHP Hotel and Choice Hotels
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MHP and Choice is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MHP Hotel AG 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 MHP Hotel 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 MHP Hotel AG 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 MHP Hotel i.e., MHP Hotel and Choice Hotels go up and down completely randomly.
Pair Corralation between MHP Hotel and Choice Hotels
Assuming the 90 days trading horizon MHP Hotel is expected to generate 4.66 times less return on investment than Choice Hotels. In addition to that, MHP Hotel is 1.51 times more volatile than Choice Hotels International. It trades about 0.01 of its total potential returns per unit of risk. Choice Hotels International is currently generating about 0.04 per unit of volatility. If you would invest 10,772 in Choice Hotels International on August 28, 2024 and sell it today you would earn a total of 3,428 from holding Choice Hotels International or generate 31.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MHP Hotel AG vs. Choice Hotels International
Performance |
Timeline |
MHP Hotel AG |
Choice Hotels Intern |
MHP Hotel and Choice Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MHP Hotel and Choice Hotels
The main advantage of trading using opposite MHP Hotel and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MHP Hotel 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.MHP Hotel vs. Warner Music Group | MHP Hotel vs. Sumitomo Rubber Industries | MHP Hotel vs. Ross Stores | MHP Hotel vs. NEWELL RUBBERMAID |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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