Correlation Between Wyndham Hotels and Gateway Real

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

Diversification Opportunities for Wyndham Hotels and Gateway Real

-0.18

Correlation Coefficient

Wyndham Hotels  Gateway Real

Good diversification

The 3 months correlation between Wyndham and Gateway is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate 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 Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and Gateway Real go up and down completely randomly.

Pair Corralation between Wyndham Hotels and Gateway Real

If you would invest  70.00  in Gateway Real Estate on October 20, 2024 and sell it today you would earn a total of  33.00  from holding Gateway Real Estate or generate 47.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Wyndham Hotels Resorts  vs.  Gateway Real Estate

Wyndham Hotels Resorts

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Wyndham Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Wyndham Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

Gateway Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gateway Real unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wyndham Hotels and Gateway Real

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

The idea behind Wyndham Hotels Resorts and Gateway Real Estate 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.