Correlation Between Pressure Technologies and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Pressure Technologies 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 Pressure Technologies and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pressure Technologies Plc and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Pressure Technologies 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 Pressure Technologies with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pressure Technologies and Wyndham Hotels.
Diversification Opportunities for Pressure Technologies and Wyndham Hotels
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pressure and Wyndham is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pressure Technologies Plc 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 Pressure Technologies 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 Pressure Technologies Plc 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 Pressure Technologies i.e., Pressure Technologies and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Pressure Technologies and Wyndham Hotels
Assuming the 90 days trading horizon Pressure Technologies Plc is expected to under-perform the Wyndham Hotels. In addition to that, Pressure Technologies is 1.62 times more volatile than Wyndham Hotels Resorts. It trades about -0.36 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.26 per unit of volatility. If you would invest 10,025 in Wyndham Hotels Resorts on October 29, 2024 and sell it today you would earn a total of 464.00 from holding Wyndham Hotels Resorts or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pressure Technologies Plc vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Pressure Technologies Plc |
| Wyndham Hotels Resorts |
Pressure Technologies and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pressure Technologies and Wyndham Hotels
The main advantage of trading using opposite Pressure Technologies and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pressure Technologies 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.| Pressure Technologies vs. Take Two Interactive Software | Pressure Technologies vs. Europa Metals | Pressure Technologies vs. CNH Industrial NV | Pressure Technologies vs. Golden Metal Resources |
| Wyndham Hotels vs. Lundin Mining Corp | Wyndham Hotels vs. iShares Physical Silver | Wyndham Hotels vs. Synthomer plc | Wyndham Hotels vs. Bisichi Mining PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |