Correlation Between Wyndham Hotels and Wingstop
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Wingstop 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 Wingstop 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 Wingstop, you can compare the effects of market volatilities on Wyndham Hotels and Wingstop 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 Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Wingstop.
Diversification Opportunities for Wyndham Hotels and Wingstop
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wyndham and Wingstop is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop 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 Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Wingstop go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Wingstop
Allowing for the 90-day total investment horizon Wyndham Hotels is expected to generate 1.94 times less return on investment than Wingstop. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.53 times less risky than Wingstop. It trades about 0.06 of its potential returns per unit of risk. Wingstop is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,433 in Wingstop on September 12, 2024 and sell it today you would earn a total of 18,556 from holding Wingstop or generate 128.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Wingstop
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Wingstop |
Wyndham Hotels and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Wingstop
The main advantage of trading using opposite Wyndham Hotels and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop's 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 |
| Wingstop vs. Noble Romans | Wingstop vs. Good Times Restaurants | Wingstop vs. Flanigans Enterprises | Wingstop vs. FAT Brands |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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