Correlation Between Choice Hotels and GelStat Corp
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and GelStat Corp 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 GelStat Corp 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 GelStat Corp, you can compare the effects of market volatilities on Choice Hotels and GelStat Corp 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 GelStat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and GelStat Corp.
Diversification Opportunities for Choice Hotels and GelStat Corp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Choice and GelStat is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and GelStat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GelStat Corp 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 GelStat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GelStat Corp has no effect on the direction of Choice Hotels i.e., Choice Hotels and GelStat Corp go up and down completely randomly.
Pair Corralation between Choice Hotels and GelStat Corp
Considering the 90-day investment horizon Choice Hotels is expected to generate 3.05 times less return on investment than GelStat Corp. But when comparing it to its historical volatility, Choice Hotels International is 14.69 times less risky than GelStat Corp. It trades about 0.36 of its potential returns per unit of risk. GelStat Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.04 in GelStat Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding GelStat Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. GelStat Corp
Performance |
| Timeline |
| Choice Hotels Intern |
| GelStat Corp |
Choice Hotels and GelStat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and GelStat Corp
The main advantage of trading using opposite Choice Hotels and GelStat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, GelStat Corp 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 GelStat Corp will offset losses from the drop in GelStat Corp'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 |
| GelStat Corp vs. Brainsway | GelStat Corp vs. Venus Concept | GelStat Corp vs. Tactile Systems Technology | GelStat Corp vs. Icecure Medical |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |