Correlation Between Clean Energy and HYATT HOTELS
Can any of the company-specific risk be diversified away by investing in both Clean Energy and HYATT 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 Clean Energy and HYATT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and HYATT HOTELS A, you can compare the effects of market volatilities on Clean Energy and HYATT 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 Clean Energy with a short position of HYATT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and HYATT HOTELS.
Diversification Opportunities for Clean Energy and HYATT HOTELS
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clean and HYATT is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and Clean Energy 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 Clean Energy Fuels are associated (or correlated) with HYATT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Clean Energy i.e., Clean Energy and HYATT HOTELS go up and down completely randomly.
Pair Corralation between Clean Energy and HYATT HOTELS
Assuming the 90 days horizon Clean Energy Fuels is expected to under-perform the HYATT HOTELS. In addition to that, Clean Energy is 2.94 times more volatile than HYATT HOTELS A. It trades about -0.05 of its total potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.09 per unit of volatility. If you would invest 14,665 in HYATT HOTELS A on September 12, 2024 and sell it today you would earn a total of 400.00 from holding HYATT HOTELS A or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. HYATT HOTELS A
Performance |
| Timeline |
| Clean Energy Fuels |
| HYATT HOTELS A |
Clean Energy and HYATT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and HYATT HOTELS
The main advantage of trading using opposite Clean Energy and HYATT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy position performs unexpectedly, HYATT 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 HYATT HOTELS will offset losses from the drop in HYATT HOTELS's long position.| Clean Energy vs. NISSAN CHEMICAL IND | Clean Energy vs. PRECISION DRILLING P | Clean Energy vs. Consolidated Communications Holdings | Clean Energy vs. Nissan Chemical Corp |
| HYATT HOTELS vs. Apple Inc | HYATT HOTELS vs. Apple Inc | HYATT HOTELS vs. Apple Inc | HYATT HOTELS vs. Apple Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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