Correlation Between Choice Hotels and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and KENEDIX OFFICE 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 KENEDIX OFFICE 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 KENEDIX OFFICE INV, you can compare the effects of market volatilities on Choice Hotels and KENEDIX OFFICE 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and KENEDIX OFFICE.
Diversification Opportunities for Choice Hotels and KENEDIX OFFICE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Choice and KENEDIX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of Choice Hotels i.e., Choice Hotels and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between Choice Hotels and KENEDIX OFFICE
Assuming the 90 days horizon Choice Hotels International is expected to generate 1.23 times more return on investment than KENEDIX OFFICE. However, Choice Hotels is 1.23 times more volatile than KENEDIX OFFICE INV. It trades about 0.07 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about -0.01 per unit of risk. If you would invest 11,219 in Choice Hotels International on October 12, 2024 and sell it today you would earn a total of 2,181 from holding Choice Hotels International or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| Choice Hotels Intern |
| KENEDIX OFFICE INV |
Choice Hotels and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and KENEDIX OFFICE
The main advantage of trading using opposite Choice Hotels and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| Choice Hotels vs. SEI INVESTMENTS | Choice Hotels vs. Japan Asia Investment | Choice Hotels vs. Apollo Investment Corp | Choice Hotels vs. SLR Investment Corp |
| KENEDIX OFFICE vs. Shenandoah Telecommunications | KENEDIX OFFICE vs. GAMING FAC SA | KENEDIX OFFICE vs. ecotel communication ag | KENEDIX OFFICE vs. Singapore Telecommunications Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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