Correlation Between HYATT HOTELS and Dollar General
Can any of the company-specific risk be diversified away by investing in both HYATT HOTELS and Dollar General 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 HYATT HOTELS and Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYATT HOTELS A and Dollar General, you can compare the effects of market volatilities on HYATT HOTELS and Dollar General 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 HYATT HOTELS with a short position of Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYATT HOTELS and Dollar General.
Diversification Opportunities for HYATT HOTELS and Dollar General
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between HYATT and Dollar is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding HYATT HOTELS A and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General and HYATT 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 HYATT HOTELS A are associated (or correlated) with Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of HYATT HOTELS i.e., HYATT HOTELS and Dollar General go up and down completely randomly.
Pair Corralation between HYATT HOTELS and Dollar General
Assuming the 90 days trading horizon HYATT HOTELS A is expected to generate 0.92 times more return on investment than Dollar General. However, HYATT HOTELS A is 1.08 times less risky than Dollar General. It trades about 0.08 of its potential returns per unit of risk. Dollar General is currently generating about -0.06 per unit of risk. If you would invest 14,041 in HYATT HOTELS A on October 21, 2024 and sell it today you would earn a total of 1,219 from holding HYATT HOTELS A or generate 8.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HYATT HOTELS A vs. Dollar General
Performance |
Timeline |
HYATT HOTELS A |
Dollar General |
HYATT HOTELS and Dollar General Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HYATT HOTELS and Dollar General
The main advantage of trading using opposite HYATT HOTELS and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYATT HOTELS position performs unexpectedly, Dollar General 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 Dollar General will offset losses from the drop in Dollar General's long position.HYATT HOTELS vs. Ebro Foods SA | ||
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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