Correlation Between Choice Hotels and Alligator Energy
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Alligator Energy 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 Choice Hotels and Alligator Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Hotels International and Alligator Energy Limited, you can compare the effects of market volatilities on Choice Hotels and Alligator Energy 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 Choice Hotels with a short position of Alligator Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Alligator Energy.
Diversification Opportunities for Choice Hotels and Alligator Energy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Choice and Alligator is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Alligator Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alligator Energy and Choice Hotels 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 Choice Hotels International are associated (or correlated) with Alligator Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alligator Energy has no effect on the direction of Choice Hotels i.e., Choice Hotels and Alligator Energy go up and down completely randomly.
Pair Corralation between Choice Hotels and Alligator Energy
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.14 times more return on investment than Alligator Energy. However, Choice Hotels International is 7.22 times less risky than Alligator Energy. It trades about 0.06 of its potential returns per unit of risk. Alligator Energy Limited is currently generating about 0.0 per unit of risk. If you would invest 14,784 in Choice Hotels International on November 27, 2024 and sell it today you would earn a total of 249.00 from holding Choice Hotels International or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. Alligator Energy Limited
Performance |
| Timeline |
| Choice Hotels Intern |
| Alligator Energy |
Choice Hotels and Alligator Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Alligator Energy
The main advantage of trading using opposite Choice Hotels and Alligator Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Alligator Energy 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 Alligator Energy will offset losses from the drop in Alligator Energy's long position.| Choice Hotels vs. Hyatt Hotels | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. Marriott International |
| Alligator Energy vs. Aura Energy Limited | Alligator Energy vs. Appia Energy Corp | Alligator Energy vs. Purepoint Uranium Group | Alligator Energy vs. Peninsula Energy |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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