Correlation Between HYATT HOTELS-A and MIRAMAR HOTEL

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

Diversification Opportunities for HYATT HOTELS-A and MIRAMAR HOTEL

0.68

Correlation Coefficient

HYATT HOTELS-A  MIRAMAR HOTEL

Poor diversification

The 3 months correlation between HYATT and MIRAMAR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding HYATT HOTELS A and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of HYATT HOTELS-A i.e., HYATT HOTELS-A and MIRAMAR HOTEL go up and down completely randomly.

Pair Corralation between HYATT HOTELS-A and MIRAMAR HOTEL

Assuming the 90 days trading horizon HYATT HOTELS A is expected to under-perform the MIRAMAR HOTEL. In addition to that, HYATT HOTELS-A is 2.09 times more volatile than MIRAMAR HOTEL INV. It trades about -0.19 of its total potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about -0.08 per unit of volatility. If you would invest  113.00  in MIRAMAR HOTEL INV on December 30, 2024 and sell it today you would lose (6.00) from holding MIRAMAR HOTEL INV or give up 5.31% of portfolio value over 90 days.

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

HYATT HOTELS A  vs.  MIRAMAR HOTEL INV

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 unsteady 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.

MIRAMAR HOTEL INV

Risk-Adjusted Performance

Very Weak

Over the last 90 days MIRAMAR HOTEL INV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MIRAMAR HOTEL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HYATT HOTELS-A and MIRAMAR HOTEL

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

The idea behind HYATT HOTELS A and MIRAMAR HOTEL INV 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.