Correlation Between Hyatt Hotels and Whitbread PLC
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and Whitbread PLC 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 Whitbread PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and Whitbread PLC ADR, you can compare the effects of market volatilities on Hyatt Hotels and Whitbread PLC 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 Whitbread PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and Whitbread PLC.
Diversification Opportunities for Hyatt Hotels and Whitbread PLC
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyatt and Whitbread is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Whitbread PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread PLC ADR 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 Whitbread PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread PLC ADR has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Whitbread PLC go up and down completely randomly.
Pair Corralation between Hyatt Hotels and Whitbread PLC
Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 1.24 times more return on investment than Whitbread PLC. However, Hyatt Hotels is 1.24 times more volatile than Whitbread PLC ADR. It trades about 0.06 of its potential returns per unit of risk. Whitbread PLC ADR is currently generating about 0.03 per unit of risk. If you would invest 9,883 in Hyatt Hotels on September 4, 2024 and sell it today you would earn a total of 5,738 from holding Hyatt Hotels or generate 58.06% 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. Whitbread PLC ADR
Performance |
| Timeline |
| Hyatt Hotels |
| Whitbread PLC ADR |
Hyatt Hotels and Whitbread PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and Whitbread PLC
The main advantage of trading using opposite Hyatt Hotels and Whitbread PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, Whitbread PLC 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 Whitbread PLC will offset losses from the drop in Whitbread PLC's 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 |
| Whitbread PLC vs. Hyatt Hotels | Whitbread PLC vs. Choice Hotels International | Whitbread PLC vs. Hilton Worldwide Holdings | Whitbread PLC vs. Wyndham Hotels Resorts |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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