Correlation Between DevEx Resources and Marriott International

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

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

Diversification Opportunities for DevEx Resources and Marriott International

-0.78

Correlation Coefficient

DevEx Resources  Marriott International

Pay attention - limited upside

The 3 months correlation between DevEx and Marriott is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and DevEx Resources 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 DevEx Resources Limited are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of DevEx Resources i.e., DevEx Resources and Marriott International go up and down completely randomly.

Pair Corralation between DevEx Resources and Marriott International

Assuming the 90 days horizon DevEx Resources Limited is expected to generate 13.89 times more return on investment than Marriott International. However, DevEx Resources is 13.89 times more volatile than Marriott International. It trades about 0.07 of its potential returns per unit of risk. Marriott International is currently generating about -0.26 per unit of risk. If you would invest  5.50  in DevEx Resources Limited on October 10, 2024 and sell it today you would earn a total of  0.15  from holding DevEx Resources Limited or generate 2.73% return on investment over 90 days.

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

DevEx Resources Limited  vs.  Marriott International

DevEx Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Marriott International

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marriott International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Marriott International may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with DevEx Resources and Marriott International

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

The idea behind DevEx Resources Limited and Marriott International 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.