Correlation Between Choice Hotels and Clever Leaves
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Clever Leaves 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 Clever Leaves 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 Clever Leaves Holdings, you can compare the effects of market volatilities on Choice Hotels and Clever Leaves 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 Clever Leaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Clever Leaves.
Diversification Opportunities for Choice Hotels and Clever Leaves
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Choice and Clever is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Clever Leaves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clever Leaves 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 Clever Leaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clever Leaves Holdings has no effect on the direction of Choice Hotels i.e., Choice Hotels and Clever Leaves go up and down completely randomly.
Pair Corralation between Choice Hotels and Clever Leaves
Considering the 90-day investment horizon Choice Hotels is expected to generate 930.35 times less return on investment than Clever Leaves. But when comparing it to its historical volatility, Choice Hotels International is 177.03 times less risky than Clever Leaves. It trades about 0.06 of its potential returns per unit of risk. Clever Leaves Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Clever Leaves Holdings on November 27, 2024 and sell it today you would earn a total of 0.07 from holding Clever Leaves Holdings or generate 140.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Choice Hotels International vs. Clever Leaves Holdings
Performance |
| Timeline |
| Choice Hotels Intern |
| Clever Leaves Holdings |
Choice Hotels and Clever Leaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Clever Leaves
The main advantage of trading using opposite Choice Hotels and Clever Leaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Clever Leaves 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 Clever Leaves will offset losses from the drop in Clever Leaves' long position.| Choice Hotels vs. Hyatt Hotels | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. Marriott International |
| Clever Leaves vs. Flora Growth Corp | Clever Leaves vs. AgriFORCE Growing Systems | Clever Leaves vs. Greenlane Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stocks Directory Find actively traded stocks across global markets |