Correlation Between Hemisphere Energy and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Hemisphere Energy and Wyndham 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 Hemisphere Energy and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hemisphere Energy Corp and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Hemisphere Energy and Wyndham 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 Hemisphere Energy with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Wyndham Hotels.
Diversification Opportunities for Hemisphere Energy and Wyndham Hotels
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hemisphere and Wyndham is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy Corp and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and Hemisphere Energy 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 Hemisphere Energy Corp are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of Hemisphere Energy i.e., Hemisphere Energy and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Hemisphere Energy and Wyndham Hotels
Assuming the 90 days trading horizon Hemisphere Energy Corp is expected to generate 1.27 times more return on investment than Wyndham Hotels. However, Hemisphere Energy is 1.27 times more volatile than Wyndham Hotels Resorts. It trades about 0.08 of its potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.06 per unit of risk. If you would invest 64.00 in Hemisphere Energy Corp on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Hemisphere Energy Corp or generate 93.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hemisphere Energy Corp vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Hemisphere Energy Corp |
| Wyndham Hotels Resorts |
Hemisphere Energy and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hemisphere Energy and Wyndham Hotels
The main advantage of trading using opposite Hemisphere Energy and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere Energy position performs unexpectedly, Wyndham 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.| Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc | Hemisphere Energy vs. Apple Inc |
| Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. INTERCONT HOTELS | Wyndham Hotels vs. Choice Hotels International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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