Correlation Between MPH Health and HYATT HOTELS-A

Can any of the company-specific risk be diversified away by investing in both MPH Health and HYATT HOTELS-A 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 MPH Health and HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MPH Health Care and HYATT HOTELS A, you can compare the effects of market volatilities on MPH Health and HYATT HOTELS-A 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 MPH Health with a short position of HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPH Health and HYATT HOTELS-A.

Diversification Opportunities for MPH Health and HYATT HOTELS-A

0.45

Correlation Coefficient

MPH Health  HYATT HOTELS-A

Very weak diversification

The 3 months correlation between MPH and HYATT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MPH Health Care and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and MPH Health 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 MPH Health Care are associated (or correlated) with HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of MPH Health i.e., MPH Health and HYATT HOTELS-A go up and down completely randomly.

Pair Corralation between MPH Health and HYATT HOTELS-A

Assuming the 90 days trading horizon MPH Health Care is expected to generate 0.61 times more return on investment than HYATT HOTELS-A. However, MPH Health Care is 1.65 times less risky than HYATT HOTELS-A. It trades about 0.04 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about -0.19 per unit of risk. If you would invest  2,240  in MPH Health Care on December 21, 2024 and sell it today you would earn a total of  60.00  from holding MPH Health Care or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MPH Health Care  vs.  HYATT HOTELS A

MPH Health Care

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MPH Health Care are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, MPH Health is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 fragile 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.

Pair Trading with MPH Health and HYATT HOTELS-A

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

The idea behind MPH Health Care and HYATT HOTELS A 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.