Correlation Between Choice Hotels and Reborn Coffee
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Reborn Coffee 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 Reborn Coffee 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 Reborn Coffee, you can compare the effects of market volatilities on Choice Hotels and Reborn Coffee 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 Reborn Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Reborn Coffee.
Diversification Opportunities for Choice Hotels and Reborn Coffee
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choice and Reborn is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Reborn Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reborn Coffee 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 Reborn Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reborn Coffee has no effect on the direction of Choice Hotels i.e., Choice Hotels and Reborn Coffee go up and down completely randomly.
Pair Corralation between Choice Hotels and Reborn Coffee
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.16 times more return on investment than Reborn Coffee. However, Choice Hotels International is 6.43 times less risky than Reborn Coffee. It trades about 0.04 of its potential returns per unit of risk. Reborn Coffee is currently generating about 0.0 per unit of risk. If you would invest 12,215 in Choice Hotels International on September 12, 2024 and sell it today you would earn a total of 2,187 from holding Choice Hotels International or generate 17.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Choice Hotels International vs. Reborn Coffee
Performance |
Timeline |
Choice Hotels Intern |
Reborn Coffee |
Choice Hotels and Reborn Coffee Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Choice Hotels and Reborn Coffee
The main advantage of trading using opposite Choice Hotels and Reborn Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Reborn Coffee 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 Reborn Coffee will offset losses from the drop in Reborn Coffee's long position.Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. Marriott International | Choice Hotels vs. Huazhu Group |
Reborn Coffee vs. Noble Romans | Reborn Coffee vs. Good Times Restaurants | Reborn Coffee vs. Flanigans Enterprises | Reborn Coffee vs. FAT Brands |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |