Correlation Between HYATT HOTELS-A and QUALCOMM Incorporated

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

Diversification Opportunities for HYATT HOTELS-A and QUALCOMM Incorporated

0.68

Correlation Coefficient

HYATT HOTELS-A  QUALCOMM Incorporated

Poor diversification

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

Pair Corralation between HYATT HOTELS-A and QUALCOMM Incorporated

Assuming the 90 days trading horizon HYATT HOTELS A is expected to under-perform the QUALCOMM Incorporated. In addition to that, HYATT HOTELS-A is 1.33 times more volatile than QUALCOMM Incorporated. It trades about -0.19 of its total potential returns per unit of risk. QUALCOMM Incorporated is currently generating about -0.03 per unit of volatility. If you would invest  15,109  in QUALCOMM Incorporated on December 23, 2024 and sell it today you would lose (627.00) from holding QUALCOMM Incorporated or give up 4.15% 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.  QUALCOMM Incorporated

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 uncertain 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.

QUALCOMM Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days QUALCOMM Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, QUALCOMM Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HYATT HOTELS-A and QUALCOMM Incorporated

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

The idea behind HYATT HOTELS A and QUALCOMM Incorporated 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 Stocks Directory module to find actively traded stocks across global markets.