Correlation Between HYATT HOTELS-A and American Water

Can any of the company-specific risk be diversified away by investing in both HYATT HOTELS-A and American Water 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-A and American Water 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 American Water Works, you can compare the effects of market volatilities on HYATT HOTELS-A and American Water 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-A with a short position of American Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYATT HOTELS-A and American Water.

Diversification Opportunities for HYATT HOTELS-A and American Water

0.0

Correlation Coefficient

HYATT HOTELS-A  American Water

Pay attention - limited upside

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

Pair Corralation between HYATT HOTELS-A and American Water

If you would invest (100.00) in American Water Works on December 22, 2024 and sell it today you would earn a total of  100.00  from holding American Water Works 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

HYATT HOTELS A  vs.  American Water Works

HYATT HOTELS A

Risk-Adjusted Performance

Very Weak

Over the last 90 days HYATT HOTELS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

American Water Works

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Water Works are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, American Water may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with HYATT HOTELS-A and American Water

The main advantage of trading using opposite HYATT HOTELS-A and American Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYATT HOTELS-A position performs unexpectedly, American Water 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 American Water will offset losses from the drop in American Water's long position.

The idea behind HYATT HOTELS A and American Water Works 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.

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..