Correlation Between H2O Retailing and HYATT HOTELS
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and HYATT 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 H2O Retailing and HYATT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and HYATT HOTELS A, you can compare the effects of market volatilities on H2O Retailing and HYATT 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 H2O Retailing with a short position of HYATT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and HYATT HOTELS.
Diversification Opportunities for H2O Retailing and HYATT HOTELS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between H2O and HYATT is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and H2O Retailing 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 H2O Retailing are associated (or correlated) with HYATT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of H2O Retailing i.e., H2O Retailing and HYATT HOTELS go up and down completely randomly.
Pair Corralation between H2O Retailing and HYATT HOTELS
Assuming the 90 days horizon H2O Retailing is expected to generate 1.49 times more return on investment than HYATT HOTELS. However, H2O Retailing is 1.49 times more volatile than HYATT HOTELS A. It trades about 0.05 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.01 per unit of risk. If you would invest 1,320 in H2O Retailing on October 19, 2024 and sell it today you would earn a total of 20.00 from holding H2O Retailing or generate 1.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
H2O Retailing vs. HYATT HOTELS A
Performance |
Timeline |
H2O Retailing |
HYATT HOTELS A |
H2O Retailing and HYATT HOTELS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with H2O Retailing and HYATT HOTELS
The main advantage of trading using opposite H2O Retailing and HYATT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, HYATT 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 HYATT HOTELS will offset losses from the drop in HYATT HOTELS's long position.H2O Retailing vs. USU Software AG | H2O Retailing vs. CHEMICAL INDUSTRIES | H2O Retailing vs. Guidewire Software | H2O Retailing vs. OPERA SOFTWARE |
HYATT HOTELS vs. COMPUTERSHARE | HYATT HOTELS vs. BURLINGTON STORES | HYATT HOTELS vs. H2O Retailing | HYATT HOTELS vs. BJs Wholesale Club |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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