Correlation Between GreenTree Hospitality and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality 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 GreenTree Hospitality and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and Wyndham Hotels Resorts, you can compare the effects of market volatilities on GreenTree Hospitality 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 GreenTree Hospitality with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and Wyndham Hotels.
Diversification Opportunities for GreenTree Hospitality and Wyndham Hotels
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between GreenTree and Wyndham is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group 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 GreenTree Hospitality 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 GreenTree Hospitality Group 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 GreenTree Hospitality i.e., GreenTree Hospitality and Wyndham Hotels go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and Wyndham Hotels
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the Wyndham Hotels. In addition to that, GreenTree Hospitality is 1.2 times more volatile than Wyndham Hotels Resorts. It trades about -0.24 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.26 per unit of volatility. If you would invest 8,927 in Wyndham Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 842.00 from holding Wyndham Hotels Resorts or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| GreenTree Hospitality |
| Wyndham Hotels Resorts |
GreenTree Hospitality and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and Wyndham Hotels
The main advantage of trading using opposite GreenTree Hospitality and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality 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.| GreenTree Hospitality vs. LuxUrban Hotels | GreenTree Hospitality vs. InterContinental Hotels Group | GreenTree Hospitality vs. Atour Lifestyle Holdings | GreenTree Hospitality vs. Huazhu Group |
| Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Marriott International |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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