Correlation Between Wyndham Hotels and Life Time
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Life Time 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 Life Time 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 Life Time Group, you can compare the effects of market volatilities on Wyndham Hotels and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Life Time.
Diversification Opportunities for Wyndham Hotels and Life Time
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wyndham and Life is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Life Time go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Life Time
Allowing for the 90-day total investment horizon Wyndham Hotels is expected to generate 1.96 times less return on investment than Life Time. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.79 times less risky than Life Time. It trades about 0.05 of its potential returns per unit of risk. Life Time Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,316 in Life Time Group on September 4, 2024 and sell it today you would earn a total of 1,096 from holding Life Time Group or generate 83.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Life Time Group
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Life Time Group |
Wyndham Hotels and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Life Time
The main advantage of trading using opposite Wyndham Hotels and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time'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 |
| Life Time vs. Hyatt Hotels | Life Time vs. Smart Share Global | Life Time vs. Sweetgreen | Life Time vs. Wyndham Hotels Resorts |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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