Correlation Between Choice Hotels and Torrent Capital
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Torrent Capital 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 Torrent Capital 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 Torrent Capital, you can compare the effects of market volatilities on Choice Hotels and Torrent Capital 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 Torrent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Torrent Capital.
Diversification Opportunities for Choice Hotels and Torrent Capital
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choice and Torrent is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Torrent Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrent Capital 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 Torrent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrent Capital has no effect on the direction of Choice Hotels i.e., Choice Hotels and Torrent Capital go up and down completely randomly.
Pair Corralation between Choice Hotels and Torrent Capital
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.47 times more return on investment than Torrent Capital. However, Choice Hotels International is 2.13 times less risky than Torrent Capital. It trades about 0.08 of its potential returns per unit of risk. Torrent Capital is currently generating about -0.03 per unit of risk. If you would invest 11,213 in Choice Hotels International on September 1, 2024 and sell it today you would earn a total of 3,911 from holding Choice Hotels International or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Choice Hotels International vs. Torrent Capital
Performance |
| Timeline |
| Choice Hotels Intern |
| Torrent Capital |
Choice Hotels and Torrent Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Torrent Capital
The main advantage of trading using opposite Choice Hotels and Torrent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Torrent Capital 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 Torrent Capital will offset losses from the drop in Torrent Capital'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 |
| Torrent Capital vs. Blackhawk Growth Corp | Torrent Capital vs. Guardian Capital Group | Torrent Capital vs. Flow Capital Corp | Torrent Capital vs. Princeton Capital |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |