Correlation Between FLOW TRADERS and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Wyndham Hotels Resorts, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Wyndham Hotels.
Diversification Opportunities for FLOW TRADERS and Wyndham Hotels
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FLOW and Wyndham is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Wyndham Hotels go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Wyndham Hotels
Assuming the 90 days horizon FLOW TRADERS is expected to generate 2.67 times less return on investment than Wyndham Hotels. In addition to that, FLOW TRADERS is 1.26 times more volatile than Wyndham Hotels Resorts. It trades about 0.02 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.05 per unit of volatility. If you would invest 6,769 in Wyndham Hotels Resorts on October 17, 2024 and sell it today you would earn a total of 2,981 from holding Wyndham Hotels Resorts or generate 44.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Wyndham Hotels Resorts |
FLOW TRADERS and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Wyndham Hotels
The main advantage of trading using opposite FLOW TRADERS and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. Easy Software AG | FLOW TRADERS vs. Gaztransport Technigaz SA | FLOW TRADERS vs. Texas Roadhouse | FLOW TRADERS vs. ASURE SOFTWARE |
| Wyndham Hotels vs. Verizon Communications | Wyndham Hotels vs. FAST RETAIL ADR | Wyndham Hotels vs. FLOW TRADERS LTD | Wyndham Hotels vs. Tradegate AG Wertpapierhandelsbank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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