Correlation Between Greatland Gold and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Greatland Gold 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 Greatland Gold and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatland Gold plc and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Greatland Gold 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 Greatland Gold with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatland Gold and Wyndham Hotels.
Diversification Opportunities for Greatland Gold and Wyndham Hotels
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Greatland and Wyndham is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Greatland Gold plc 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 Greatland Gold 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 Greatland Gold plc 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 Greatland Gold i.e., Greatland Gold and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Greatland Gold and Wyndham Hotels
Assuming the 90 days trading horizon Greatland Gold plc is expected to generate 4.18 times more return on investment than Wyndham Hotels. However, Greatland Gold is 4.18 times more volatile than Wyndham Hotels Resorts. It trades about 0.4 of its potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.31 per unit of risk. If you would invest 515.00 in Greatland Gold plc on September 14, 2024 and sell it today you would earn a total of 225.00 from holding Greatland Gold plc or generate 43.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Greatland Gold plc vs. Wyndham Hotels Resorts
Performance |
Timeline |
Greatland Gold plc |
Wyndham Hotels Resorts |
Greatland Gold and Wyndham Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Greatland Gold and Wyndham Hotels
The main advantage of trading using opposite Greatland Gold and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatland Gold 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.Greatland Gold vs. Wyndham Hotels Resorts | Greatland Gold vs. Creo Medical Group | Greatland Gold vs. Litigation Capital Management | Greatland Gold vs. Park Hotels Resorts |
Wyndham Hotels vs. DFS Furniture PLC | Wyndham Hotels vs. Nordic Semiconductor ASA | Wyndham Hotels vs. Take Two Interactive Software | Wyndham Hotels vs. Beazer Homes USA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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