Correlation Between CTS Eventim and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both CTS Eventim and Wyndham Hotels 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 CTS Eventim and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTS Eventim AG and Wyndham Hotels Resorts, you can compare the effects of market volatilities on CTS Eventim and Wyndham Hotels 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 CTS Eventim with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS Eventim and Wyndham Hotels.
Diversification Opportunities for CTS Eventim and Wyndham Hotels
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CTS and Wyndham is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and CTS Eventim 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 CTS Eventim AG are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of CTS Eventim i.e., CTS Eventim and Wyndham Hotels go up and down completely randomly.
Pair Corralation between CTS Eventim and Wyndham Hotels
Assuming the 90 days horizon CTS Eventim AG is expected to generate 1.26 times more return on investment than Wyndham Hotels. However, CTS Eventim is 1.26 times more volatile than Wyndham Hotels Resorts. It trades about 0.04 of its potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.05 per unit of risk. If you would invest 6,007 in CTS Eventim AG on September 2, 2024 and sell it today you would earn a total of 2,273 from holding CTS Eventim AG or generate 37.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTS Eventim AG vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| CTS Eventim AG |
| Wyndham Hotels Resorts |
CTS Eventim and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS Eventim and Wyndham Hotels
The main advantage of trading using opposite CTS Eventim and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim position performs unexpectedly, Wyndham Hotels 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.| CTS Eventim vs. Wyndham Hotels Resorts | CTS Eventim vs. Xenia Hotels Resorts | CTS Eventim vs. AUSTEVOLL SEAFOOD | CTS Eventim vs. Dalata Hotel Group |
| Wyndham Hotels vs. Khiron Life Sciences | Wyndham Hotels vs. ALGOMA STEEL GROUP | Wyndham Hotels vs. INFORMATION SVC GRP | Wyndham Hotels vs. Cass Information Systems |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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