Correlation Between Choice Hotels and CI GAMES
Can any of the company-specific risk be diversified away by investing in both Choice Hotels and CI GAMES 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 Choice Hotels and CI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Hotels International and CI GAMES SA, you can compare the effects of market volatilities on Choice Hotels and CI GAMES 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 Choice Hotels with a short position of CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and CI GAMES.
Diversification Opportunities for Choice Hotels and CI GAMES
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Choice and CI7 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA and Choice 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 Choice Hotels International are associated (or correlated) with CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of Choice Hotels i.e., Choice Hotels and CI GAMES go up and down completely randomly.
Pair Corralation between Choice Hotels and CI GAMES
Assuming the 90 days horizon Choice Hotels International is expected to generate 0.32 times more return on investment than CI GAMES. However, Choice Hotels International is 3.1 times less risky than CI GAMES. It trades about 0.04 of its potential returns per unit of risk. CI GAMES SA is currently generating about 0.0 per unit of risk. If you would invest 10,110 in Choice Hotels International on September 23, 2024 and sell it today you would earn a total of 3,290 from holding Choice Hotels International or generate 32.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Choice Hotels International vs. CI GAMES SA
Performance |
Timeline |
Choice Hotels Intern |
CI GAMES SA |
Choice Hotels and CI GAMES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Choice Hotels and CI GAMES
The main advantage of trading using opposite Choice Hotels and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels position performs unexpectedly, CI GAMES 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 CI GAMES will offset losses from the drop in CI GAMES's long position.Choice Hotels vs. Take Two Interactive Software | Choice Hotels vs. QIIWI GAMES AB | Choice Hotels vs. CPU SOFTWAREHOUSE | Choice Hotels vs. BRAGG GAMING GRP |
CI GAMES vs. Wyndham Hotels Resorts | CI GAMES vs. Choice Hotels International | CI GAMES vs. Park Hotels Resorts | CI GAMES vs. UNITED RENTALS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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