Correlation Between Yuexiu Transport and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Choice 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 Yuexiu Transport and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuexiu Transport Infrastructure and Choice Hotels International, you can compare the effects of market volatilities on Yuexiu Transport and Choice 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 Yuexiu Transport with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Choice Hotels.
Diversification Opportunities for Yuexiu Transport and Choice Hotels
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuexiu and Choice is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Choice Hotels go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Choice Hotels
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.32 times more return on investment than Choice Hotels. However, Yuexiu Transport is 1.32 times more volatile than Choice Hotels International. It trades about 0.15 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.11 per unit of risk. If you would invest 44.00 in Yuexiu Transport Infrastructure on October 11, 2024 and sell it today you would earn a total of 2.00 from holding Yuexiu Transport Infrastructure or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Choice Hotels International
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Choice Hotels Intern |
Yuexiu Transport and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Choice Hotels
The main advantage of trading using opposite Yuexiu Transport and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Choice 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| Yuexiu Transport vs. INTERSHOP Communications Aktiengesellschaft | Yuexiu Transport vs. ecotel communication ag | Yuexiu Transport vs. United Airlines Holdings | Yuexiu Transport vs. THAI BEVERAGE |
| Choice Hotels vs. SEI INVESTMENTS | Choice Hotels vs. Japan Asia Investment | Choice Hotels vs. Apollo Investment Corp | Choice Hotels vs. SLR Investment Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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