Correlation Between Qingdao Port and Hyatt Hotels

Can any of the company-specific risk be diversified away by investing in both Qingdao Port 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 Qingdao Port and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qingdao Port International and Hyatt Hotels, you can compare the effects of market volatilities on Qingdao Port 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 Qingdao Port with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Port and Hyatt Hotels.

Diversification Opportunities for Qingdao Port and Hyatt Hotels

0.54

Correlation Coefficient

Qingdao Port  Hyatt Hotels

Very weak diversification

The 3 months correlation between Qingdao and Hyatt is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Port International and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Qingdao Port 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 Qingdao Port International 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 has no effect on the direction of Qingdao Port i.e., Qingdao Port and Hyatt Hotels go up and down completely randomly.

Pair Corralation between Qingdao Port and Hyatt Hotels

Assuming the 90 days horizon Qingdao Port International is expected to generate 0.64 times more return on investment than Hyatt Hotels. However, Qingdao Port International is 1.56 times less risky than Hyatt Hotels. It trades about 0.02 of its potential returns per unit of risk. Hyatt Hotels is currently generating about -0.16 per unit of risk. If you would invest  75.00  in Qingdao Port International on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Qingdao Port International or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Qingdao Port International  vs.  Hyatt Hotels

Qingdao Port Interna

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Port International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Qingdao Port is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Hyatt Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyatt Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Qingdao Port and Hyatt Hotels

The main advantage of trading using opposite Qingdao Port and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Port 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' long position.

The idea behind Qingdao Port International and Hyatt Hotels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.