Correlation Between Wyndham Hotels and Everi Holdings
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Everi Holdings 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 Everi Holdings 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 Everi Holdings, you can compare the effects of market volatilities on Wyndham Hotels and Everi Holdings 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 Everi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Everi Holdings.
Diversification Opportunities for Wyndham Hotels and Everi Holdings
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wyndham and Everi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings 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 Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Everi Holdings go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Everi Holdings
Allowing for the 90-day total investment horizon Wyndham Hotels Resorts is expected to generate 5.53 times more return on investment than Everi Holdings. However, Wyndham Hotels is 5.53 times more volatile than Everi Holdings. It trades about 0.2 of its potential returns per unit of risk. Everi Holdings is currently generating about 0.22 per unit of risk. If you would invest 9,712 in Wyndham Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 432.00 from holding Wyndham Hotels Resorts or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Everi Holdings
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Everi Holdings |
Wyndham Hotels and Everi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Everi Holdings
The main advantage of trading using opposite Wyndham Hotels and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Everi Holdings 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 Everi Holdings will offset losses from the drop in Everi Holdings' long position.| Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Marriott International | Wyndham Hotels vs. Choice Hotels International |
| Everi Holdings vs. Accel Entertainment | Everi Holdings vs. Light Wonder | Everi Holdings vs. Inspired Entertainment | Everi Holdings vs. International Game Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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