Correlation Between Choice Hotels and Rémy Cointreau
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and Rémy Cointreau 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 Rémy Cointreau 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 Rmy Cointreau SA, you can compare the effects of market volatilities on Choice Hotels and Rémy Cointreau 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 Rémy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Rémy Cointreau.
Diversification Opportunities for Choice Hotels and Rémy Cointreau
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Choice and Rémy is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Rmy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmy Cointreau SA 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 Rémy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmy Cointreau SA has no effect on the direction of Choice Hotels i.e., Choice Hotels and Rémy Cointreau go up and down completely randomly.
Pair Corralation between Choice Hotels and Rémy Cointreau
Assuming the 90 days horizon Choice Hotels International is expected to generate 0.7 times more return on investment than Rémy Cointreau. However, Choice Hotels International is 1.42 times less risky than Rémy Cointreau. It trades about 0.02 of its potential returns per unit of risk. Rmy Cointreau SA is currently generating about -0.3 per unit of risk. If you would invest 13,371 in Choice Hotels International on October 11, 2024 and sell it today you would earn a total of 29.00 from holding Choice Hotels International or generate 0.22% 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. Rmy Cointreau SA
Performance |
| Timeline |
| Choice Hotels Intern |
| Rmy Cointreau SA |
Choice Hotels and Rémy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Rémy Cointreau
The main advantage of trading using opposite Choice Hotels and Rémy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, Rémy Cointreau 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 Rémy Cointreau will offset losses from the drop in Rémy Cointreau'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 |
| Rémy Cointreau vs. Xenia Hotels Resorts | Rémy Cointreau vs. PPHE HOTEL GROUP | Rémy Cointreau vs. Choice Hotels International | Rémy Cointreau vs. INTERCONT HOTELS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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