Correlation Between LuxUrban Hotels and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both LuxUrban Hotels 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 LuxUrban Hotels and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LuxUrban Hotels and Hyatt Hotels, you can compare the effects of market volatilities on LuxUrban Hotels 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 LuxUrban Hotels with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of LuxUrban Hotels and Hyatt Hotels.
Diversification Opportunities for LuxUrban Hotels and Hyatt Hotels
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LuxUrban and Hyatt is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding LuxUrban Hotels and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and LuxUrban 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 LuxUrban Hotels 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 LuxUrban Hotels i.e., LuxUrban Hotels and Hyatt Hotels go up and down completely randomly.
Pair Corralation between LuxUrban Hotels and Hyatt Hotels
Given the investment horizon of 90 days LuxUrban Hotels is expected to under-perform the Hyatt Hotels. In addition to that, LuxUrban Hotels is 5.13 times more volatile than Hyatt Hotels. It trades about -0.26 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.06 per unit of volatility. If you would invest 15,643 in Hyatt Hotels on August 28, 2024 and sell it today you would earn a total of 388.00 from holding Hyatt Hotels or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
LuxUrban Hotels vs. Hyatt Hotels
Performance |
| Timeline |
| LuxUrban Hotels |
| Hyatt Hotels |
LuxUrban Hotels and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LuxUrban Hotels and Hyatt Hotels
The main advantage of trading using opposite LuxUrban Hotels and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LuxUrban Hotels 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.| LuxUrban Hotels vs. GreenTree Hospitality Group | LuxUrban Hotels vs. InterContinental Hotels Group | LuxUrban Hotels vs. Atour Lifestyle Holdings | LuxUrban Hotels vs. Huazhu Group |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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