Correlation Between RATIONAL UNADR and HYATT HOTELS

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Can any of the company-specific risk be diversified away by investing in both RATIONAL UNADR 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 RATIONAL UNADR and HYATT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RATIONAL UNADR 1 and HYATT HOTELS A, you can compare the effects of market volatilities on RATIONAL UNADR 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 RATIONAL UNADR with a short position of HYATT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATIONAL UNADR and HYATT HOTELS.

Diversification Opportunities for RATIONAL UNADR and HYATT HOTELS

RATIONALHYATTDiversified AwayRATIONALHYATTDiversified Away100%
-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between RATIONAL and HYATT is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding RATIONAL UNADR 1 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 RATIONAL UNADR 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 RATIONAL UNADR 1 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 RATIONAL UNADR i.e., RATIONAL UNADR and HYATT HOTELS go up and down completely randomly.

Pair Corralation between RATIONAL UNADR and HYATT HOTELS

Assuming the 90 days trading horizon RATIONAL UNADR 1 is expected to generate 0.55 times more return on investment than HYATT HOTELS. However, RATIONAL UNADR 1 is 1.8 times less risky than HYATT HOTELS. It trades about 0.1 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about -0.1 per unit of risk. If you would invest  4,000  in RATIONAL UNADR 1 on November 20, 2024 and sell it today you would earn a total of  120.00  from holding RATIONAL UNADR 1 or generate 3.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

RATIONAL UNADR 1  vs.  HYATT HOTELS A

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15RAA1 1HTA
       Timeline  
RATIONAL UNADR 1 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days RATIONAL UNADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, RATIONAL UNADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3940414243
HYATT HOTELS A 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days HYATT HOTELS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb135140145150155160

RATIONAL UNADR and HYATT HOTELS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.71-3.52-2.34-1.160.01.162.363.564.775.97 0.050.100.15
JavaScript chart by amCharts 3.21.15RAA1 1HTA
       Returns  

Pair Trading with RATIONAL UNADR and HYATT HOTELS

The main advantage of trading using opposite RATIONAL UNADR and HYATT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATIONAL UNADR 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.
The idea behind RATIONAL UNADR 1 and HYATT HOTELS A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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