Correlation Between MakeMyTrip and Marriott International
Can any of the company-specific risk be diversified away by investing in both MakeMyTrip and Marriott International 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 Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MakeMyTrip Limited and Marriott International, you can compare the effects of market volatilities on MakeMyTrip and Marriott International 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 Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of MakeMyTrip and Marriott International.
Diversification Opportunities for MakeMyTrip and Marriott International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MakeMyTrip and Marriott is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MakeMyTrip Limited and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International 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 Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of MakeMyTrip i.e., MakeMyTrip and Marriott International go up and down completely randomly.
Pair Corralation between MakeMyTrip and Marriott International
Given the investment horizon of 90 days MakeMyTrip Limited is expected to generate 2.44 times more return on investment than Marriott International. However, MakeMyTrip is 2.44 times more volatile than Marriott International. It trades about 0.13 of its potential returns per unit of risk. Marriott International is currently generating about 0.09 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. Marriott International
Performance |
| Timeline |
| MakeMyTrip Limited |
| Marriott International |
MakeMyTrip and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MakeMyTrip and Marriott International
The main advantage of trading using opposite MakeMyTrip and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MakeMyTrip position performs unexpectedly, Marriott International 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 Marriott International will offset losses from the drop in Marriott International's long position.| MakeMyTrip vs. Tuniu Corp | MakeMyTrip vs. Mondee Holdings | MakeMyTrip vs. Amadeus IT Group | MakeMyTrip vs. Travel Leisure Co |
| Marriott International vs. Yatra Online | Marriott International vs. Mondee Holdings | Marriott International vs. MakeMyTrip Limited | Marriott International 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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