Correlation Between Choice Hotels and JCDecaux
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and JCDecaux 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 JCDecaux 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 JCDecaux SA, you can compare the effects of market volatilities on Choice Hotels and JCDecaux 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 JCDecaux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and JCDecaux.
Diversification Opportunities for Choice Hotels and JCDecaux
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Choice and JCDecaux is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and JCDecaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCDecaux SA 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 JCDecaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCDecaux SA has no effect on the direction of Choice Hotels i.e., Choice Hotels and JCDecaux go up and down completely randomly.
Pair Corralation between Choice Hotels and JCDecaux
If you would invest 1,517 in JCDecaux SA on November 28, 2024 and sell it today you would earn a total of 0.00 from holding JCDecaux SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Choice Hotels International vs. JCDecaux SA
Performance |
| Timeline |
| Choice Hotels Intern |
| JCDecaux SA |
Choice Hotels and JCDecaux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and JCDecaux
The main advantage of trading using opposite Choice Hotels and JCDecaux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, JCDecaux 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 JCDecaux will offset losses from the drop in JCDecaux'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 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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