Correlation Between Choice Hotels and Atour Lifestyle
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Atour Lifestyle 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 Atour Lifestyle 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 Atour Lifestyle Holdings, you can compare the effects of market volatilities on Choice Hotels and Atour Lifestyle 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 Atour Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Atour Lifestyle.
Diversification Opportunities for Choice Hotels and Atour Lifestyle
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choice and Atour is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Atour Lifestyle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atour Lifestyle Holdings 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 Atour Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atour Lifestyle Holdings has no effect on the direction of Choice Hotels i.e., Choice Hotels and Atour Lifestyle go up and down completely randomly.
Pair Corralation between Choice Hotels and Atour Lifestyle
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.5 times more return on investment than Atour Lifestyle. However, Choice Hotels International is 2.0 times less risky than Atour Lifestyle. It trades about 0.36 of its potential returns per unit of risk. Atour Lifestyle Holdings is currently generating about -0.11 per unit of risk. If you would invest 14,084 in Choice Hotels International on August 28, 2024 and sell it today you would earn a total of 1,189 from holding Choice Hotels International or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. Atour Lifestyle Holdings
Performance |
| Timeline |
| Choice Hotels Intern |
| Atour Lifestyle Holdings |
Choice Hotels and Atour Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Atour Lifestyle
The main advantage of trading using opposite Choice Hotels and Atour Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Atour Lifestyle 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 Atour Lifestyle will offset losses from the drop in Atour Lifestyle'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 |
| Atour Lifestyle vs. InterContinental Hotels Group | Atour Lifestyle vs. GreenTree Hospitality Group | Atour Lifestyle vs. Hyatt Hotels | Atour Lifestyle vs. Choice Hotels 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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