Correlation Between Choice Hotels and RepliCel Life
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and RepliCel Life 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 RepliCel Life 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 RepliCel Life Sciences, you can compare the effects of market volatilities on Choice Hotels and RepliCel Life 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 RepliCel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and RepliCel Life.
Diversification Opportunities for Choice Hotels and RepliCel Life
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choice and RepliCel is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and RepliCel Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RepliCel Life Sciences 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 RepliCel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RepliCel Life Sciences has no effect on the direction of Choice Hotels i.e., Choice Hotels and RepliCel Life go up and down completely randomly.
Pair Corralation between Choice Hotels and RepliCel Life
Considering the 90-day investment horizon Choice Hotels is expected to generate 171.83 times less return on investment than RepliCel Life. But when comparing it to its historical volatility, Choice Hotels International is 12.08 times less risky than RepliCel Life. It trades about 0.02 of its potential returns per unit of risk. RepliCel Life Sciences is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.10 in RepliCel Life Sciences on November 28, 2024 and sell it today you would earn a total of 0.10 from holding RepliCel Life Sciences or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. RepliCel Life Sciences
Performance |
| Timeline |
| Choice Hotels Intern |
| RepliCel Life Sciences |
Choice Hotels and RepliCel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and RepliCel Life
The main advantage of trading using opposite Choice Hotels and RepliCel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, RepliCel Life 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 RepliCel Life will offset losses from the drop in RepliCel Life'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 |
| RepliCel Life vs. Vaxcyte | RepliCel Life vs. Larimar Therapeutics | RepliCel Life vs. Syndax Pharmaceuticals | RepliCel Life vs. Merus BV |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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