Correlation Between Choice Hotels and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and COVIVIO 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 Choice Hotels and COVIVIO HOTELS 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 COVIVIO HOTELS INH, you can compare the effects of market volatilities on Choice Hotels and COVIVIO 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 Choice Hotels with a short position of COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and COVIVIO HOTELS.
Diversification Opportunities for Choice Hotels and COVIVIO HOTELS
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choice and COVIVIO is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of Choice Hotels i.e., Choice Hotels and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between Choice Hotels and COVIVIO HOTELS
Assuming the 90 days horizon Choice Hotels International is expected to under-perform the COVIVIO HOTELS. In addition to that, Choice Hotels is 1.39 times more volatile than COVIVIO HOTELS INH. It trades about -0.11 of its total potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.11 per unit of volatility. If you would invest 2,070 in COVIVIO HOTELS INH on January 18, 2025 and sell it today you would earn a total of 130.00 from holding COVIVIO HOTELS INH or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| Choice Hotels Intern |
| COVIVIO HOTELS INH |
Choice Hotels and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and COVIVIO HOTELS
The main advantage of trading using opposite Choice Hotels and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, COVIVIO 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| Choice Hotels vs. Marriott International | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. H World Group | Choice Hotels vs. Hyatt Hotels |
| COVIVIO HOTELS vs. Mitsui Chemicals | COVIVIO HOTELS vs. OURGAME INTHOLDL 00005 | COVIVIO HOTELS vs. FUTURE GAMING GRP | COVIVIO HOTELS vs. Perdoceo Education |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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