Correlation Between Regions Financial and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Regions Financial 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 Regions Financial and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Regions Financial 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 Regions Financial with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and Wyndham Hotels.
Diversification Opportunities for Regions Financial and Wyndham Hotels
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regions and Wyndham is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial 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 Regions Financial 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 Regions Financial 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 Regions Financial i.e., Regions Financial and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Regions Financial and Wyndham Hotels
Assuming the 90 days horizon Regions Financial is expected to generate 1.41 times less return on investment than Wyndham Hotels. In addition to that, Regions Financial is 1.26 times more volatile than Wyndham Hotels Resorts. It trades about 0.04 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.08 per unit of volatility. If you would invest 6,081 in Wyndham Hotels Resorts on December 4, 2024 and sell it today you would earn a total of 4,319 from holding Wyndham Hotels Resorts or generate 71.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Regions Financial |
| Wyndham Hotels Resorts |
Regions Financial and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and Wyndham Hotels
The main advantage of trading using opposite Regions Financial and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial 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.| Regions Financial vs. INDO RAMA SYNTHETIC | Regions Financial vs. Sixt Leasing SE | Regions Financial vs. Mitsui Chemicals | Regions Financial vs. TIANDE CHEMICAL |
| Wyndham Hotels vs. Chiba Bank | Wyndham Hotels vs. PRINCIPAL FINANCIAL | Wyndham Hotels vs. Guangdong Investment Limited | Wyndham Hotels vs. ECHO INVESTMENT ZY |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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