Correlation Between Wyndham Hotels and LuxUrban Hotels
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and LuxUrban 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 Wyndham Hotels and LuxUrban Hotels 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 LuxUrban Hotels, you can compare the effects of market volatilities on Wyndham Hotels and LuxUrban 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 Wyndham Hotels with a short position of LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and LuxUrban Hotels.
Diversification Opportunities for Wyndham Hotels and LuxUrban Hotels
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wyndham and LuxUrban is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and LuxUrban Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels 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 LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and LuxUrban Hotels go up and down completely randomly.
Pair Corralation between Wyndham Hotels and LuxUrban Hotels
Allowing for the 90-day total investment horizon Wyndham Hotels Resorts is expected to generate 0.13 times more return on investment than LuxUrban Hotels. However, Wyndham Hotels Resorts is 7.5 times less risky than LuxUrban Hotels. It trades about 0.25 of its potential returns per unit of risk. LuxUrban Hotels is currently generating about -0.26 per unit of risk. If you would invest 8,927 in Wyndham Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 842.00 from holding Wyndham Hotels Resorts or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. LuxUrban Hotels
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| LuxUrban Hotels |
Wyndham Hotels and LuxUrban Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and LuxUrban Hotels
The main advantage of trading using opposite Wyndham Hotels and LuxUrban Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, LuxUrban 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 LuxUrban Hotels will offset losses from the drop in LuxUrban Hotels' long position.| Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Marriott International |
| LuxUrban Hotels vs. GreenTree Hospitality Group | LuxUrban Hotels vs. InterContinental Hotels Group | LuxUrban Hotels vs. Atour Lifestyle Holdings | LuxUrban Hotels vs. Huazhu Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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