Correlation Between Wyndham Hotels and Viking Holdings
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Viking 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 Viking 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 Viking Holdings, you can compare the effects of market volatilities on Wyndham Hotels and Viking 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 Viking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Viking Holdings.
Diversification Opportunities for Wyndham Hotels and Viking Holdings
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wyndham and Viking is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking 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 Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Viking Holdings go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Viking Holdings
Allowing for the 90-day total investment horizon Wyndham Hotels is expected to generate 2.78 times less return on investment than Viking Holdings. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.33 times less risky than Viking Holdings. It trades about 0.08 of its potential returns per unit of risk. Viking Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,610 in Viking Holdings on August 27, 2024 and sell it today you would earn a total of 1,924 from holding Viking Holdings or generate 73.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.13% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Viking Holdings
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Viking Holdings |
Wyndham Hotels and Viking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Viking Holdings
The main advantage of trading using opposite Wyndham Hotels and Viking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Viking 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 Viking Holdings will offset losses from the drop in Viking Holdings' long position.| Wyndham Hotels vs. InterContinental Hotels Group | Wyndham Hotels vs. Hyatt Hotels | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. Marriott International |
| Viking Holdings vs. Evolution Mining | Viking Holdings vs. LB Foster | Viking Holdings vs. NioCorp Developments Ltd | Viking Holdings vs. Coupang LLC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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