Correlation Between Marriott International and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Marriott International and Dalata Hotel 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 Marriott International and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Dalata Hotel Group, you can compare the effects of market volatilities on Marriott International and Dalata Hotel 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 Marriott International with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Dalata Hotel.
Diversification Opportunities for Marriott International and Dalata Hotel
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marriott and Dalata is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and Marriott International 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 Marriott International are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Marriott International i.e., Marriott International and Dalata Hotel go up and down completely randomly.
Pair Corralation between Marriott International and Dalata Hotel
Assuming the 90 days horizon Marriott International is expected to generate 0.76 times more return on investment than Dalata Hotel. However, Marriott International is 1.31 times less risky than Dalata Hotel. It trades about 0.11 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.04 per unit of risk. If you would invest 19,171 in Marriott International on November 5, 2024 and sell it today you would earn a total of 9,429 from holding Marriott International or generate 49.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. Dalata Hotel Group
Performance |
| Timeline |
| Marriott International |
| Dalata Hotel Group |
Marriott International and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Dalata Hotel
The main advantage of trading using opposite Marriott International and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Marriott International vs. Magic Software Enterprises | Marriott International vs. Kingdee International Software | Marriott International vs. RYU Apparel | Marriott International vs. Beta Systems Software |
| Dalata Hotel vs. MAGIC SOFTWARE ENTR | Dalata Hotel vs. Cogent Communications Holdings | Dalata Hotel vs. Guidewire Software | Dalata Hotel vs. OPERA SOFTWARE |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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