Correlation Between Wyndham Hotels and Boston International

Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and Boston International 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 Boston International 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 Boston International Holdings, you can compare the effects of market volatilities on Wyndham Hotels and Boston International 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 Boston International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and Boston International.

Diversification Opportunities for Wyndham Hotels and Boston International

0.0

Correlation Coefficient

Wyndham Hotels  Boston International

Pay attention - limited upside

The 3 months correlation between Wyndham and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Boston International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston International 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 Boston International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston International has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Boston International go up and down completely randomly.

Pair Corralation between Wyndham Hotels and Boston International

If you would invest (100.00) in Boston International Holdings on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Boston International Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wyndham Hotels Resorts  vs.  Boston International Holdings

Wyndham Hotels Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wyndham Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Boston International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boston International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Boston International is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Wyndham Hotels and Boston International

The main advantage of trading using opposite Wyndham Hotels and Boston International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, Boston International 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 Boston International will offset losses from the drop in Boston International's long position.

The idea behind Wyndham Hotels Resorts and Boston International Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..