Correlation Between Marriott International and Ladybug Resource
Can any of the company-specific risk be diversified away by investing in both Marriott International and Ladybug Resource 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 Ladybug Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Ladybug Resource Group, you can compare the effects of market volatilities on Marriott International and Ladybug Resource 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 Ladybug Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Ladybug Resource.
Diversification Opportunities for Marriott International and Ladybug Resource
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marriott and Ladybug is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Ladybug Resource Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladybug Resource 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 Ladybug Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladybug Resource has no effect on the direction of Marriott International i.e., Marriott International and Ladybug Resource go up and down completely randomly.
Pair Corralation between Marriott International and Ladybug Resource
Considering the 90-day investment horizon Marriott International is expected to generate 1.24 times less return on investment than Ladybug Resource. But when comparing it to its historical volatility, Marriott International is 9.7 times less risky than Ladybug Resource. It trades about 0.14 of its potential returns per unit of risk. Ladybug Resource Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Ladybug Resource Group on September 1, 2024 and sell it today you would lose (0.85) from holding Ladybug Resource Group or give up 56.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. Ladybug Resource Group
Performance |
| Timeline |
| Marriott International |
| Ladybug Resource |
Marriott International and Ladybug Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Ladybug Resource
The main advantage of trading using opposite Marriott International and Ladybug Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Ladybug Resource 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 Ladybug Resource will offset losses from the drop in Ladybug Resource'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 |
| Ladybug Resource vs. Altria Group | Ladybug Resource vs. British American Tobacco | Ladybug Resource vs. Universal | Ladybug Resource vs. Imperial Brands PLC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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