Correlation Between Marriott International and Hongkong
Can any of the company-specific risk be diversified away by investing in both Marriott International and Hongkong 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 Hongkong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and The Hongkong And, you can compare the effects of market volatilities on Marriott International and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Hongkong.
Diversification Opportunities for Marriott International and Hongkong
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marriott and Hongkong is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and The Hongkong And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongkong And 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongkong And has no effect on the direction of Marriott International i.e., Marriott International and Hongkong go up and down completely randomly.
Pair Corralation between Marriott International and Hongkong
Considering the 90-day investment horizon Marriott International is expected to generate 1.01 times less return on investment than Hongkong. But when comparing it to its historical volatility, Marriott International is 2.59 times less risky than Hongkong. It trades about 0.1 of its potential returns per unit of risk. The Hongkong And is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 75.00 in The Hongkong And on September 3, 2024 and sell it today you would earn a total of 5.00 from holding The Hongkong And or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.17% |
| Values | Daily Returns |
Marriott International vs. The Hongkong And
Performance |
| Timeline |
| Marriott International |
| Hongkong And |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marriott International and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Hongkong
The main advantage of trading using opposite Marriott International and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong'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 |
| Hongkong vs. Hilton Worldwide Holdings | Hongkong vs. InterContinental Hotels Group | Hongkong vs. Marriott International | Hongkong 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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