Correlation Between Caesars Entertainment and Marriott International
Can any of the company-specific risk be diversified away by investing in both Caesars Entertainment and Marriott International 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 Caesars Entertainment and Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caesars Entertainment and Marriott International, you can compare the effects of market volatilities on Caesars Entertainment and Marriott International 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 Caesars Entertainment with a short position of Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caesars Entertainment and Marriott International.
Diversification Opportunities for Caesars Entertainment and Marriott International
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caesars and Marriott is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Caesars Entertainment and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and Caesars Entertainment 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 Caesars Entertainment are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Caesars Entertainment i.e., Caesars Entertainment and Marriott International go up and down completely randomly.
Pair Corralation between Caesars Entertainment and Marriott International
Considering the 90-day investment horizon Caesars Entertainment is expected to generate 10.52 times less return on investment than Marriott International. In addition to that, Caesars Entertainment is 1.74 times more volatile than Marriott International. It trades about 0.01 of its total potential returns per unit of risk. Marriott International is currently generating about 0.19 per unit of volatility. If you would invest 23,020 in Marriott International on November 2, 2024 and sell it today you would earn a total of 6,234 from holding Marriott International or generate 27.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caesars Entertainment vs. Marriott International
Performance |
| Timeline |
| Caesars Entertainment |
| Marriott International |
Caesars Entertainment and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caesars Entertainment and Marriott International
The main advantage of trading using opposite Caesars Entertainment and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caesars Entertainment position performs unexpectedly, Marriott International 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 Marriott International will offset losses from the drop in Marriott International's long position.| Caesars Entertainment vs. Las Vegas Sands | Caesars Entertainment vs. Wynn Resorts Limited | Caesars Entertainment vs. Penn National Gaming | Caesars Entertainment vs. Melco Resorts Entertainment |
| Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. Choice Hotels International | Marriott International vs. Wyndham Hotels Resorts |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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