Correlation Between Marriott International and Shangri-La Asia
Can any of the company-specific risk be diversified away by investing in both Marriott International and Shangri-La Asia 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 Shangri-La Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Shangri La Asia Limited, you can compare the effects of market volatilities on Marriott International and Shangri-La Asia 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 Shangri-La Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Shangri-La Asia.
Diversification Opportunities for Marriott International and Shangri-La Asia
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marriott and Shangri-La is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Shangri La Asia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Asia 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 Shangri-La Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Asia has no effect on the direction of Marriott International i.e., Marriott International and Shangri-La Asia go up and down completely randomly.
Pair Corralation between Marriott International and Shangri-La Asia
If you would invest 25,944 in Marriott International on September 1, 2024 and sell it today you would earn a total of 2,965 from holding Marriott International or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Marriott International vs. Shangri La Asia Limited
Performance |
| Timeline |
| Marriott International |
| Shangri La Asia |
Marriott International and Shangri-La Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Shangri-La Asia
The main advantage of trading using opposite Marriott International and Shangri-La Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Shangri-La Asia 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 Shangri-La Asia will offset losses from the drop in Shangri-La Asia'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 |
| Shangri-La Asia vs. Marriott International | Shangri-La Asia vs. Hilton Worldwide Holdings | Shangri-La Asia vs. InterContinental Hotels Group | Shangri-La Asia vs. InterContinental Hotels Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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