Correlation Between Choice Hotels and Shangri La
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Shangri La 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 Shangri La 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 Shangri La Asia Limited, you can compare the effects of market volatilities on Choice Hotels and Shangri La 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 Shangri La. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Shangri La.
Diversification Opportunities for Choice Hotels and Shangri La
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Choice and Shangri is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Shangri La Asia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Asia 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 Shangri La. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Asia has no effect on the direction of Choice Hotels i.e., Choice Hotels and Shangri La go up and down completely randomly.
Pair Corralation between Choice Hotels and Shangri La
If you would invest 14,434 in Choice Hotels International on September 13, 2024 and sell it today you would earn a total of 213.00 from holding Choice Hotels International or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Choice Hotels International vs. Shangri La Asia Limited
Performance |
| Timeline |
| Choice Hotels Intern |
| Shangri La Asia |
Choice Hotels and Shangri La Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Shangri La
The main advantage of trading using opposite Choice Hotels and Shangri La positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Shangri La 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 Shangri La will offset losses from the drop in Shangri La's long position.| Choice Hotels vs. Yatra Online | Choice Hotels vs. Despegar Corp | Choice Hotels vs. Mondee Holdings | Choice Hotels vs. MakeMyTrip Limited |
| Shangri La vs. Hilton Worldwide Holdings | Shangri La vs. Hyatt Hotels | Shangri La vs. Wyndham Hotels Resorts | Shangri La vs. Choice Hotels International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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