Correlation Between Choice Hotels and GLOBAL
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By analyzing existing cross correlation between Choice Hotels International and GLOBAL PAYMENTS INC, you can compare the effects of market volatilities on Choice Hotels and GLOBAL 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 GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and GLOBAL.
Diversification Opportunities for Choice Hotels and GLOBAL
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choice and GLOBAL is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and GLOBAL PAYMENTS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL PAYMENTS INC 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 GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL PAYMENTS INC has no effect on the direction of Choice Hotels i.e., Choice Hotels and GLOBAL go up and down completely randomly.
Pair Corralation between Choice Hotels and GLOBAL
Considering the 90-day investment horizon Choice Hotels International is expected to generate 2.57 times more return on investment than GLOBAL. However, Choice Hotels is 2.57 times more volatile than GLOBAL PAYMENTS INC. It trades about 0.16 of its potential returns per unit of risk. GLOBAL PAYMENTS INC is currently generating about -0.02 per unit of risk. If you would invest 11,340 in Choice Hotels International on September 1, 2024 and sell it today you would earn a total of 3,784 from holding Choice Hotels International or generate 33.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Choice Hotels International vs. GLOBAL PAYMENTS INC
Performance |
| Timeline |
| Choice Hotels Intern |
| GLOBAL PAYMENTS INC |
Choice Hotels and GLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and GLOBAL
The main advantage of trading using opposite Choice Hotels and GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, GLOBAL 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 GLOBAL will offset losses from the drop in GLOBAL'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 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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