Correlation Between NH HOTEL and HYATT HOTELS
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and HYATT 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 NH HOTEL and HYATT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and HYATT HOTELS A, you can compare the effects of market volatilities on NH HOTEL and HYATT 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 NH HOTEL with a short position of HYATT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and HYATT HOTELS.
Diversification Opportunities for NH HOTEL and HYATT HOTELS
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NH5 and HYATT is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and NH HOTEL 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 NH HOTEL GROUP are associated (or correlated) with HYATT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of NH HOTEL i.e., NH HOTEL and HYATT HOTELS go up and down completely randomly.
Pair Corralation between NH HOTEL and HYATT HOTELS
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 4.03 times more return on investment than HYATT HOTELS. However, NH HOTEL is 4.03 times more volatile than HYATT HOTELS A. It trades about 0.19 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.12 per unit of risk. If you would invest 426.00 in NH HOTEL GROUP on October 20, 2024 and sell it today you would earn a total of 198.00 from holding NH HOTEL GROUP or generate 46.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. HYATT HOTELS A
Performance |
| Timeline |
| NH HOTEL GROUP |
| HYATT HOTELS A |
NH HOTEL and HYATT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and HYATT HOTELS
The main advantage of trading using opposite NH HOTEL and HYATT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, HYATT 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 HYATT HOTELS will offset losses from the drop in HYATT HOTELS's long position.| NH HOTEL vs. Datang International Power | NH HOTEL vs. Cass Information Systems | NH HOTEL vs. DATATEC LTD 2 | NH HOTEL vs. Teradata Corp |
| HYATT HOTELS vs. ZhongAn Online P | HYATT HOTELS vs. Gruppo Mutuionline SpA | HYATT HOTELS vs. Pembina Pipeline Corp | HYATT HOTELS vs. CARSALESCOM |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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