Correlation Between Entain Plc and Marriott Vacations

Can any of the company-specific risk be diversified away by investing in both Entain Plc and Marriott Vacations 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 Entain Plc and Marriott Vacations into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Entain Plc and Marriott Vacations Worldwide, you can compare the effects of market volatilities on Entain Plc and Marriott Vacations 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 Entain Plc with a short position of Marriott Vacations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entain Plc and Marriott Vacations.

Diversification Opportunities for Entain Plc and Marriott Vacations

0.0

Correlation Coefficient

Entain Plc  Marriott Vacations

Pay attention - limited upside

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

Pair Corralation between Entain Plc and Marriott Vacations

If you would invest (100.00) in Marriott Vacations Worldwide on October 8, 2024 and sell it today you would earn a total of  100.00  from holding Marriott Vacations Worldwide or generate -100.0% return on investment over 90 days.

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

Entain Plc  vs.  Marriott Vacations Worldwide

Entain Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entain Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Marriott Vacations

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Entain Plc and Marriott Vacations

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

The idea behind Entain Plc and Marriott Vacations Worldwide 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.