Correlation Between Hyatt Hotels and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and Ark Restaurants 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 Hyatt Hotels and Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and Ark Restaurants Corp, you can compare the effects of market volatilities on Hyatt Hotels and Ark Restaurants 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 Hyatt Hotels with a short position of Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and Ark Restaurants.
Diversification Opportunities for Hyatt Hotels and Ark Restaurants
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyatt and Ark is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp and Hyatt Hotels 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 Hyatt Hotels are associated (or correlated) with Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Ark Restaurants go up and down completely randomly.
Pair Corralation between Hyatt Hotels and Ark Restaurants
Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 0.96 times more return on investment than Ark Restaurants. However, Hyatt Hotels is 1.04 times less risky than Ark Restaurants. It trades about 0.3 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about 0.05 per unit of risk. If you would invest 14,293 in Hyatt Hotels on September 5, 2024 and sell it today you would earn a total of 1,888 from holding Hyatt Hotels or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. Ark Restaurants Corp
Performance |
| Timeline |
| Hyatt Hotels |
| Ark Restaurants Corp |
Hyatt Hotels and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and Ark Restaurants
The main advantage of trading using opposite Hyatt Hotels and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, Ark Restaurants 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 Ark Restaurants will offset losses from the drop in Ark Restaurants' long position.| Hyatt Hotels vs. Marriott International | Hyatt Hotels vs. InterContinental Hotels Group | Hyatt Hotels vs. Choice Hotels International | Hyatt Hotels vs. Wyndham Hotels Resorts |
| Ark Restaurants vs. Hyatt Hotels | Ark Restaurants vs. Smart Share Global | Ark Restaurants vs. Wyndham Hotels Resorts | Ark Restaurants vs. WW 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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