Correlation Between Tradegate and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Tradegate and Choice 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 Tradegate and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Choice Hotels International, you can compare the effects of market volatilities on Tradegate and Choice 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 Tradegate with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Choice Hotels.
Diversification Opportunities for Tradegate and Choice Hotels
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tradegate and Choice is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of Tradegate i.e., Tradegate and Choice Hotels go up and down completely randomly.
Pair Corralation between Tradegate and Choice Hotels
Assuming the 90 days horizon Tradegate is expected to generate 146.25 times less return on investment than Choice Hotels. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 3.66 times less risky than Choice Hotels. It trades about 0.0 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13,371 in Choice Hotels International on October 23, 2024 and sell it today you would earn a total of 229.00 from holding Choice Hotels International or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Choice Hotels International
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Choice Hotels Intern |
Tradegate and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Choice Hotels
The main advantage of trading using opposite Tradegate and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate position performs unexpectedly, Choice 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| Tradegate vs. CN DATANG C | Tradegate vs. Cass Information Systems | Tradegate vs. COFCO Joycome Foods | Tradegate vs. SILVER BULLET DATA |
| Choice Hotels vs. Tradegate AG Wertpapierhandelsbank | Choice Hotels vs. CarsalesCom | Choice Hotels vs. MARKET VECTR RETAIL | Choice Hotels vs. TRADEGATE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |