Correlation Between SLR Investment and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both SLR Investment and Wyndham 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 SLR Investment and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLR Investment Corp and Wyndham Hotels Resorts, you can compare the effects of market volatilities on SLR Investment and Wyndham 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 SLR Investment with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Wyndham Hotels.
Diversification Opportunities for SLR Investment and Wyndham Hotels
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SLR and Wyndham is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and SLR Investment 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 SLR Investment Corp are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of SLR Investment i.e., SLR Investment and Wyndham Hotels go up and down completely randomly.
Pair Corralation between SLR Investment and Wyndham Hotels
Assuming the 90 days horizon SLR Investment is expected to generate 2.09 times less return on investment than Wyndham Hotels. But when comparing it to its historical volatility, SLR Investment Corp is 1.46 times less risky than Wyndham Hotels. It trades about 0.16 of its potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7,620 in Wyndham Hotels Resorts on September 23, 2024 and sell it today you would earn a total of 1,930 from holding Wyndham Hotels Resorts or generate 25.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLR Investment Corp vs. Wyndham Hotels Resorts
Performance |
| Timeline |
| SLR Investment Corp |
| Wyndham Hotels Resorts |
SLR Investment and Wyndham Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLR Investment and Wyndham Hotels
The main advantage of trading using opposite SLR Investment and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Wyndham 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.| SLR Investment vs. Blackstone Group | SLR Investment vs. The Bank of | SLR Investment vs. Ameriprise Financial | SLR Investment vs. State Street |
| Wyndham Hotels vs. WIZZ AIR HLDGUNSPADR4 | Wyndham Hotels vs. PennantPark Investment | Wyndham Hotels vs. SLR Investment Corp | Wyndham Hotels vs. ALTAIR RES 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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