Correlation Between Choice Hotels and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Hyatt Hotels 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 Hyatt Hotels 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 Hyatt Hotels, you can compare the effects of market volatilities on Choice Hotels and Hyatt 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 Choice Hotels with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Hyatt Hotels.
Diversification Opportunities for Choice Hotels and Hyatt Hotels
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Choice and Hyatt is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels 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 Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Choice Hotels i.e., Choice Hotels and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Choice Hotels and Hyatt Hotels
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.77 times more return on investment than Hyatt Hotels. However, Choice Hotels International is 1.3 times less risky than Hyatt Hotels. It trades about 0.06 of its potential returns per unit of risk. Hyatt Hotels is currently generating about 0.03 per unit of risk. If you would invest 14,042 in Choice Hotels International on October 20, 2024 and sell it today you would earn a total of 132.00 from holding Choice Hotels International or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. Hyatt Hotels
Performance |
| Timeline |
| Choice Hotels Intern |
| Hyatt Hotels |
Choice Hotels and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Hyatt Hotels
The main advantage of trading using opposite Choice Hotels and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Hyatt 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Choice Hotels vs. Hyatt Hotels | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. Marriott International |
| Hyatt Hotels vs. Yatra Online | Hyatt Hotels vs. Despegar Corp | Hyatt Hotels vs. MakeMyTrip Limited | Hyatt Hotels vs. Tuniu Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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