Correlation Between Choice Hotels and EDISON INTL
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and EDISON INTL 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 EDISON INTL 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 EDISON INTL, you can compare the effects of market volatilities on Choice Hotels and EDISON INTL 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 EDISON INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and EDISON INTL.
Diversification Opportunities for Choice Hotels and EDISON INTL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choice and EDISON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and EDISON INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL 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 EDISON INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL has no effect on the direction of Choice Hotels i.e., Choice Hotels and EDISON INTL go up and down completely randomly.
Pair Corralation between Choice Hotels and EDISON INTL
If you would invest 13,500 in Choice Hotels International on September 15, 2024 and sell it today you would earn a total of 300.00 from holding Choice Hotels International or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Choice Hotels International vs. EDISON INTL
Performance |
| Timeline |
| Choice Hotels Intern |
| EDISON INTL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Choice Hotels and EDISON INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and EDISON INTL
The main advantage of trading using opposite Choice Hotels and EDISON INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, EDISON INTL 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 EDISON INTL will offset losses from the drop in EDISON INTL's long position.| Choice Hotels vs. Hyatt Hotels | Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. INTERCONT HOTELS | Choice Hotels vs. Wyndham Hotels Resorts |
| EDISON INTL vs. DATAGROUP SE | EDISON INTL vs. DICKER DATA LTD | EDISON INTL vs. Data3 Limited | EDISON INTL vs. Automatic Data Processing |
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.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |