Correlation Between Caseys General and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Caseys General and Wyndham Hotels 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 Caseys General and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Caseys General and Wyndham Hotels 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 Caseys General with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Wyndham Hotels.
Diversification Opportunities for Caseys General and Wyndham Hotels
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caseys and Wyndham is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and Caseys General 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 Caseys General Stores are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of Caseys General i.e., Caseys General and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Caseys General and Wyndham Hotels
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 1.05 times more return on investment than Wyndham Hotels. However, Caseys General is 1.05 times more volatile than Wyndham Hotels Resorts. It trades about 0.11 of its potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.09 per unit of risk. If you would invest 25,449 in Caseys General Stores on September 15, 2024 and sell it today you would earn a total of 14,951 from holding Caseys General Stores or generate 58.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Caseys General Stores |
| Wyndham Hotels Resorts |
Caseys General and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Wyndham Hotels
The main advantage of trading using opposite Caseys General and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Wyndham Hotels 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. INTERCONT HOTELS | Wyndham Hotels 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |