Correlation Between Huazhu and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Huazhu 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 Huazhu and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huazhu Group and Hyatt Hotels, you can compare the effects of market volatilities on Huazhu 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 Huazhu with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huazhu and Hyatt Hotels.
Diversification Opportunities for Huazhu and Hyatt Hotels
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huazhu and Hyatt is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Huazhu Group and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Huazhu 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 Huazhu Group 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 has no effect on the direction of Huazhu i.e., Huazhu and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Huazhu and Hyatt Hotels
Given the investment horizon of 90 days Huazhu is expected to generate 9.29 times less return on investment than Hyatt Hotels. In addition to that, Huazhu is 1.5 times more volatile than Hyatt Hotels. It trades about 0.0 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.03 per unit of volatility. If you would invest 14,763 in Hyatt Hotels on August 24, 2024 and sell it today you would earn a total of 837.00 from holding Hyatt Hotels or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huazhu Group vs. Hyatt Hotels
Performance |
| Timeline |
| Huazhu Group |
| Hyatt Hotels |
Huazhu and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huazhu and Hyatt Hotels
The main advantage of trading using opposite Huazhu and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huazhu 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' long position.| Huazhu vs. GreenTree Hospitality Group | Huazhu vs. Soho House Co | Huazhu vs. InterContinental Hotels Group | Huazhu vs. The Intergroup |
| Hyatt Hotels vs. Marriott International | Hyatt Hotels vs. InterContinental Hotels Group | Hyatt Hotels vs. Choice Hotels International | Hyatt Hotels 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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