Correlation Between Whitehaven Coal and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Whitehaven Coal 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 Whitehaven Coal and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitehaven Coal Limited and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Whitehaven Coal 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 Whitehaven Coal with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitehaven Coal and Wyndham Hotels.
Diversification Opportunities for Whitehaven Coal and Wyndham Hotels
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Whitehaven and Wyndham is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Whitehaven Coal Limited 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 Whitehaven Coal 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 Whitehaven Coal Limited 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 Whitehaven Coal i.e., Whitehaven Coal and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Whitehaven Coal and Wyndham Hotels
Assuming the 90 days horizon Whitehaven Coal is expected to generate 83.86 times less return on investment than Wyndham Hotels. In addition to that, Whitehaven Coal is 1.37 times more volatile than Wyndham Hotels Resorts. It trades about 0.0 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.07 per unit of volatility. If you would invest 7,049 in Wyndham Hotels Resorts on September 4, 2024 and sell it today you would earn a total of 2,101 from holding Wyndham Hotels Resorts or generate 29.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Whitehaven Coal Limited vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| Whitehaven Coal |
| Wyndham Hotels Resorts |
Whitehaven Coal and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitehaven Coal and Wyndham Hotels
The main advantage of trading using opposite Whitehaven Coal and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitehaven Coal 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.| Whitehaven Coal vs. Wyndham Hotels Resorts | Whitehaven Coal vs. Meli Hotels International | Whitehaven Coal vs. NH HOTEL GROUP | Whitehaven Coal vs. COVIVIO HOTELS INH |
| Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. ACCOR SPADR NEW |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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