Correlation Between Marriott International and HealthCare
Can any of the company-specific risk be diversified away by investing in both Marriott International and HealthCare 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 HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and HealthCare, you can compare the effects of market volatilities on Marriott International and HealthCare 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 HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and HealthCare.
Diversification Opportunities for Marriott International and HealthCare
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marriott and HealthCare is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and HealthCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthCare 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 HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthCare has no effect on the direction of Marriott International i.e., Marriott International and HealthCare go up and down completely randomly.
Pair Corralation between Marriott International and HealthCare
Considering the 90-day investment horizon Marriott International is expected to generate 33.44 times less return on investment than HealthCare. But when comparing it to its historical volatility, Marriott International is 37.9 times less risky than HealthCare. It trades about 0.12 of its potential returns per unit of risk. HealthCare is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 700.00 in HealthCare on November 8, 2024 and sell it today you would earn a total of 139.00 from holding HealthCare or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. HealthCare
Performance |
| Timeline |
| Marriott International |
| HealthCare |
Marriott International and HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and HealthCare
The main advantage of trading using opposite Marriott International and HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, HealthCare 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 HealthCare will offset losses from the drop in HealthCare'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 |
| HealthCare vs. Udemy Inc | HealthCare vs. BioNTech SE | HealthCare vs. Skillful Craftsman Education | HealthCare vs. 51Talk Online Education |
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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