Correlation Between Wyndham Hotels and Gan
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Gan 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 Gan 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 Gan, you can compare the effects of market volatilities on Wyndham Hotels and Gan 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 Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Gan.
Diversification Opportunities for Wyndham Hotels and Gan
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wyndham and Gan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan 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 Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Gan go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Gan
Allowing for the 90-day total investment horizon Wyndham Hotels is expected to generate 1.98 times less return on investment than Gan. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 3.41 times less risky than Gan. It trades about 0.06 of its potential returns per unit of risk. Gan is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Gan on September 15, 2024 and sell it today you would earn a total of 54.00 from holding Gan or generate 41.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Gan
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Gan |
Wyndham Hotels and Gan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Gan
The main advantage of trading using opposite Wyndham Hotels and Gan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Gan 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 Gan will offset losses from the drop in Gan's long position.| Wyndham Hotels vs. Yatra Online | Wyndham Hotels vs. Mondee Holdings | Wyndham Hotels vs. MakeMyTrip Limited | Wyndham Hotels vs. Tuniu Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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