Correlation Between Choice Hotels and HF SINCLAIR
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and HF SINCLAIR 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 HF SINCLAIR 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 HF SINCLAIR P, you can compare the effects of market volatilities on Choice Hotels and HF SINCLAIR 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 HF SINCLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and HF SINCLAIR.
Diversification Opportunities for Choice Hotels and HF SINCLAIR
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choice and HL80 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and HF SINCLAIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF SINCLAIR P 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 HF SINCLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF SINCLAIR P has no effect on the direction of Choice Hotels i.e., Choice Hotels and HF SINCLAIR go up and down completely randomly.
Pair Corralation between Choice Hotels and HF SINCLAIR
Assuming the 90 days horizon Choice Hotels International is expected to generate 0.84 times more return on investment than HF SINCLAIR. However, Choice Hotels International is 1.19 times less risky than HF SINCLAIR. It trades about 0.22 of its potential returns per unit of risk. HF SINCLAIR P is currently generating about -0.06 per unit of risk. If you would invest 10,773 in Choice Hotels International on September 12, 2024 and sell it today you would earn a total of 2,627 from holding Choice Hotels International or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. HF SINCLAIR P
Performance |
| Timeline |
| Choice Hotels Intern |
| HF SINCLAIR P |
Choice Hotels and HF SINCLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and HF SINCLAIR
The main advantage of trading using opposite Choice Hotels and HF SINCLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, HF SINCLAIR 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 HF SINCLAIR will offset losses from the drop in HF SINCLAIR'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 |
| HF SINCLAIR vs. Superior Plus Corp | HF SINCLAIR vs. SIVERS SEMICONDUCTORS AB | HF SINCLAIR vs. Norsk Hydro ASA | HF SINCLAIR vs. Reliance Steel Aluminum |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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