Correlation Between Choice Hotels and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Impala Platinum 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 Impala Platinum 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 Impala Platinum Holdings, you can compare the effects of market volatilities on Choice Hotels and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Impala Platinum.
Diversification Opportunities for Choice Hotels and Impala Platinum
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Choice and Impala is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Choice Hotels i.e., Choice Hotels and Impala Platinum go up and down completely randomly.
Pair Corralation between Choice Hotels and Impala Platinum
Assuming the 90 days horizon Choice Hotels International is expected to generate 0.46 times more return on investment than Impala Platinum. However, Choice Hotels International is 2.2 times less risky than Impala Platinum. It trades about 0.08 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.01 per unit of risk. 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 | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Choice Hotels International vs. Impala Platinum Holdings
Performance |
| Timeline |
| Choice Hotels Intern |
| Impala Platinum Holdings |
Choice Hotels and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Impala Platinum
The main advantage of trading using opposite Choice Hotels and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum'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 |
| Impala Platinum vs. HYATT HOTELS A | Impala Platinum vs. OURGAME INTHOLDL 00005 | Impala Platinum vs. Choice Hotels International | Impala Platinum vs. Hochschild Mining plc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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