Correlation Between Wyndham Hotels and ATT
Can any of the company-specific risk be diversified away by investing in both Wyndham Hotels and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Wyndham Hotels and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wyndham Hotels and ATT.
Diversification Opportunities for Wyndham Hotels and ATT
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wyndham and ATT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Wyndham Hotels Resorts and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Wyndham Hotels i.e., Wyndham Hotels and ATT go up and down completely randomly.
Pair Corralation between Wyndham Hotels and ATT
Assuming the 90 days horizon Wyndham Hotels is expected to generate 1.74 times less return on investment than ATT. But when comparing it to its historical volatility, Wyndham Hotels Resorts is 1.17 times less risky than ATT. It trades about 0.15 of its potential returns per unit of risk. ATT Inc is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,141 in ATT Inc on December 2, 2024 and sell it today you would earn a total of 484.00 from holding ATT Inc or generate 22.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wyndham Hotels Resorts vs. ATT Inc
Performance |
Timeline |
Wyndham Hotels Resorts |
ATT Inc |
Wyndham Hotels and ATT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wyndham Hotels and ATT
The main advantage of trading using opposite Wyndham Hotels and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wyndham Hotels position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.Wyndham Hotels vs. Chuangs China Investments | Wyndham Hotels vs. JLF INVESTMENT | Wyndham Hotels vs. Ubisoft Entertainment SA | Wyndham Hotels vs. ATRESMEDIA |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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