Correlation Between DAX Index and Wyndham Hotels
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By analyzing existing cross correlation between DAX Index and Wyndham Hotels Resorts, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Wyndham Hotels.
Diversification Opportunities for DAX Index and Wyndham Hotels
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Wyndham is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Wyndham Hotels go up and down completely randomly.
Pair Corralation between DAX Index and Wyndham Hotels
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Wyndham Hotels. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 1.98 times less risky than Wyndham Hotels. The index trades about -0.05 of its potential returns per unit of risk. The Wyndham Hotels Resorts is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,400 in Wyndham Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 750.00 from holding Wyndham Hotels Resorts or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Wyndham Hotels Resorts
Performance |
| Timeline |
DAX Index and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Wyndham Hotels Resorts
Pair trading matchups for Wyndham Hotels
Pair Trading with DAX Index and Wyndham Hotels
The main advantage of trading using opposite DAX Index and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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