Correlation Between MakeMyTrip and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both MakeMyTrip and Choice Hotels 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 MakeMyTrip and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MakeMyTrip Limited and Choice Hotels International, you can compare the effects of market volatilities on MakeMyTrip and Choice Hotels 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 MakeMyTrip with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MakeMyTrip and Choice Hotels.
Diversification Opportunities for MakeMyTrip and Choice Hotels
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MakeMyTrip and Choice is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MakeMyTrip Limited and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and MakeMyTrip 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 MakeMyTrip Limited are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of MakeMyTrip i.e., MakeMyTrip and Choice Hotels go up and down completely randomly.
Pair Corralation between MakeMyTrip and Choice Hotels
Given the investment horizon of 90 days MakeMyTrip Limited is expected to generate 2.12 times more return on investment than Choice Hotels. However, MakeMyTrip is 2.12 times more volatile than Choice Hotels International. It trades about 0.13 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.08 per unit of risk. If you would invest 4,686 in MakeMyTrip Limited on September 14, 2024 and sell it today you would earn a total of 7,217 from holding MakeMyTrip Limited or generate 154.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MakeMyTrip Limited vs. Choice Hotels International
Performance |
| Timeline |
| MakeMyTrip Limited |
| Choice Hotels Intern |
MakeMyTrip and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MakeMyTrip and Choice Hotels
The main advantage of trading using opposite MakeMyTrip and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MakeMyTrip position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| MakeMyTrip vs. Tuniu Corp | MakeMyTrip vs. Mondee Holdings | MakeMyTrip vs. Amadeus IT Group | MakeMyTrip vs. Travel Leisure Co |
| Choice Hotels vs. Yatra Online | Choice Hotels vs. Mondee Holdings | Choice Hotels vs. MakeMyTrip Limited | Choice Hotels vs. Tuniu Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |