Correlation Between Marriott International and Accor SA
Can any of the company-specific risk be diversified away by investing in both Marriott International and Accor SA 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 Accor SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Accor SA, you can compare the effects of market volatilities on Marriott International and Accor SA 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 Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Accor SA.
Diversification Opportunities for Marriott International and Accor SA
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marriott and Accor is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA 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 Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of Marriott International i.e., Marriott International and Accor SA go up and down completely randomly.
Pair Corralation between Marriott International and Accor SA
Considering the 90-day investment horizon Marriott International is expected to generate 0.99 times more return on investment than Accor SA. However, Marriott International is 1.01 times less risky than Accor SA. It trades about 0.24 of its potential returns per unit of risk. Accor SA is currently generating about 0.13 per unit of risk. If you would invest 23,416 in Marriott International on August 30, 2024 and sell it today you would earn a total of 5,144 from holding Marriott International or generate 21.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. Accor SA
Performance |
| Timeline |
| Marriott International |
| Accor SA |
Marriott International and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Accor SA
The main advantage of trading using opposite Marriott International and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.| Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. Choice Hotels International | Marriott International vs. Wyndham Hotels Resorts |
| Accor SA vs. Hilton Worldwide Holdings | Accor SA vs. InterContinental Hotels Group | Accor SA vs. Marriott International | Accor SA vs. Choice Hotels International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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