Correlation Between Choice Hotels and Quantum Computing
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Quantum Computing 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 Quantum Computing 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 Quantum Computing, you can compare the effects of market volatilities on Choice Hotels and Quantum Computing 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 Quantum Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Quantum Computing.
Diversification Opportunities for Choice Hotels and Quantum Computing
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Choice and Quantum is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Quantum Computing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Computing 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 Quantum Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Computing has no effect on the direction of Choice Hotels i.e., Choice Hotels and Quantum Computing go up and down completely randomly.
Pair Corralation between Choice Hotels and Quantum Computing
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.04 times more return on investment than Quantum Computing. However, Choice Hotels International is 23.89 times less risky than Quantum Computing. It trades about 0.02 of its potential returns per unit of risk. Quantum Computing is currently generating about -0.07 per unit of risk. If you would invest 14,129 in Choice Hotels International on October 21, 2024 and sell it today you would earn a total of 45.00 from holding Choice Hotels International or generate 0.32% 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. Quantum Computing
Performance |
| Timeline |
| Choice Hotels Intern |
| Quantum Computing |
Choice Hotels and Quantum Computing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Quantum Computing
The main advantage of trading using opposite Choice Hotels and Quantum Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Quantum Computing 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 Quantum Computing will offset losses from the drop in Quantum Computing'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 |
| Quantum Computing vs. D Wave Quantum | Quantum Computing vs. IONQ Inc | Quantum Computing vs. Quantum | Quantum Computing vs. Desktop Metal |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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