Correlation Between Choice Hotels and SAFEROADS HLDGS
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and SAFEROADS HLDGS 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 SAFEROADS HLDGS 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 SAFEROADS HLDGS, you can compare the effects of market volatilities on Choice Hotels and SAFEROADS HLDGS 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 SAFEROADS HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and SAFEROADS HLDGS.
Diversification Opportunities for Choice Hotels and SAFEROADS HLDGS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Choice and SAFEROADS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and SAFEROADS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFEROADS HLDGS 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 SAFEROADS HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFEROADS HLDGS has no effect on the direction of Choice Hotels i.e., Choice Hotels and SAFEROADS HLDGS go up and down completely randomly.
Pair Corralation between Choice Hotels and SAFEROADS HLDGS
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 | Flat |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Choice Hotels International vs. SAFEROADS HLDGS
Performance |
| Timeline |
| Choice Hotels Intern |
| SAFEROADS HLDGS |
Choice Hotels and SAFEROADS HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and SAFEROADS HLDGS
The main advantage of trading using opposite Choice Hotels and SAFEROADS HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, SAFEROADS HLDGS 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 SAFEROADS HLDGS will offset losses from the drop in SAFEROADS HLDGS'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 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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