Correlation Between REGAL HOTEL and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both REGAL 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 REGAL 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 REGAL HOTEL INTL and Hyatt Hotels, you can compare the effects of market volatilities on REGAL 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 REGAL HOTEL with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and Hyatt Hotels.
Diversification Opportunities for REGAL HOTEL and Hyatt Hotels
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REGAL and Hyatt is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and REGAL 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 REGAL HOTEL INTL 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 has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and Hyatt Hotels go up and down completely randomly.
Pair Corralation between REGAL HOTEL and Hyatt Hotels
Assuming the 90 days trading horizon REGAL HOTEL INTL is expected to under-perform the Hyatt Hotels. In addition to that, REGAL HOTEL is 1.32 times more volatile than Hyatt Hotels. It trades about -0.03 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.05 per unit of volatility. If you would invest 13,795 in Hyatt Hotels on October 25, 2024 and sell it today you would earn a total of 1,180 from holding Hyatt Hotels or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. Hyatt Hotels
Performance |
| Timeline |
| REGAL HOTEL INTL |
| Hyatt Hotels |
REGAL HOTEL and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and Hyatt Hotels
The main advantage of trading using opposite REGAL HOTEL and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL 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' long position.| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc |
| Hyatt Hotels vs. PTT Global Chemical | Hyatt Hotels vs. Cognizant Technology Solutions | Hyatt Hotels vs. SCOTT TECHNOLOGY | Hyatt Hotels vs. Shin Etsu Chemical Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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