Correlation Between Wyndham Hotels and Fortune Minerals

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

Diversification Opportunities for Wyndham Hotels and Fortune Minerals

0.0

Correlation Coefficient

Wyndham Hotels  Fortune Minerals

Pay attention - limited upside

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

Pair Corralation between Wyndham Hotels and Fortune Minerals

If you would invest  8,019  in Wyndham Hotels Resorts on October 6, 2024 and sell it today you would earn a total of  1,631  from holding Wyndham Hotels Resorts or generate 20.34% 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.  Fortune Minerals Limited

Wyndham Hotels Resorts

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wyndham Hotels Resorts are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Wyndham Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

Fortune Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wyndham Hotels and Fortune Minerals

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

The idea behind Wyndham Hotels Resorts and Fortune Minerals Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.