Correlation Between Wyndham Hotels and Brinker International
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Brinker International 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 Wyndham Hotels and Brinker International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wyndham Hotels Resorts and Brinker International, you can compare the effects of market volatilities on Wyndham Hotels and Brinker International 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 Wyndham Hotels with a short position of Brinker International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Brinker International.
Diversification Opportunities for Wyndham Hotels and Brinker International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wyndham and Brinker is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Brinker International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinker International and Wyndham Hotels 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 Wyndham Hotels Resorts are associated (or correlated) with Brinker International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinker International has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Brinker International go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Brinker International
Allowing for the 90-day total investment horizon Wyndham Hotels is expected to generate 3.5 times less return on investment than Brinker International. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.64 times less risky than Brinker International. It trades about 0.07 of its potential returns per unit of risk. Brinker International is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,449 in Brinker International on November 1, 2024 and sell it today you would earn a total of 14,801 from holding Brinker International or generate 429.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Brinker International
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Brinker International |
Wyndham Hotels and Brinker International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Brinker International
The main advantage of trading using opposite Wyndham Hotels and Brinker International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Brinker International 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 Brinker International will offset losses from the drop in Brinker International's long position.| Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Marriott International |
| Brinker International vs. Dennys Corp | Brinker International vs. Bloomin Brands | Brinker International vs. Jack In The | Brinker International vs. Dine Brands Global |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |