Correlation Between Wyndham Hotels and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Whitbread Plc 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 Whitbread Plc 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 Whitbread plc, you can compare the effects of market volatilities on Wyndham Hotels and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Whitbread Plc.
Diversification Opportunities for Wyndham Hotels and Whitbread Plc
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wyndham and Whitbread is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Whitbread Plc go up and down completely randomly.
Pair Corralation between Wyndham Hotels and Whitbread Plc
Allowing for the 90-day total investment horizon Wyndham Hotels Resorts is expected to generate 1.01 times more return on investment than Whitbread Plc. However, Wyndham Hotels is 1.01 times more volatile than Whitbread plc. It trades about 0.22 of its potential returns per unit of risk. Whitbread plc is currently generating about -0.23 per unit of risk. If you would invest 9,971 in Wyndham Hotels Resorts on October 20, 2024 and sell it today you would earn a total of 354.00 from holding Wyndham Hotels Resorts or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wyndham Hotels Resorts vs. Whitbread plc
Performance |
| Timeline |
| Wyndham Hotels Resorts |
| Whitbread plc |
Wyndham Hotels and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wyndham Hotels and Whitbread Plc
The main advantage of trading using opposite Wyndham Hotels and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| Wyndham Hotels vs. Yatra Online | Wyndham Hotels vs. Despegar Corp | Wyndham Hotels vs. MakeMyTrip Limited | Wyndham Hotels vs. Tuniu Corp |
| Whitbread Plc vs. National CineMedia | Whitbread Plc vs. Here Media | Whitbread Plc vs. Ubisoft Entertainment | Whitbread Plc vs. Zhihu Inc ADR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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