Correlation Between Gaming Realms and Wyndham Hotels

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Can any of the company-specific risk be diversified away by investing in both Gaming Realms and Wyndham Hotels 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 Gaming Realms and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Realms plc and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Gaming Realms and Wyndham Hotels 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 Gaming Realms with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Realms and Wyndham Hotels.

Diversification Opportunities for Gaming Realms and Wyndham Hotels

GamingWyndhamDiversified AwayGamingWyndhamDiversified Away100%
-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Gaming and Wyndham is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Realms plc and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and Gaming Realms 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 Gaming Realms plc are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of Gaming Realms i.e., Gaming Realms and Wyndham Hotels go up and down completely randomly.

Pair Corralation between Gaming Realms and Wyndham Hotels

Assuming the 90 days trading horizon Gaming Realms plc is expected to under-perform the Wyndham Hotels. In addition to that, Gaming Realms is 1.89 times more volatile than Wyndham Hotels Resorts. It trades about -0.01 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.25 per unit of volatility. If you would invest  8,827  in Wyndham Hotels Resorts on October 31, 2024 and sell it today you would earn a total of  1,684  from holding Wyndham Hotels Resorts or generate 19.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gaming Realms plc  vs.  Wyndham Hotels Resorts

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 05101520
JavaScript chart by amCharts 3.21.15GMR 0YTR
       Timeline  
Gaming Realms plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gaming Realms plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Gaming Realms is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan3334353637383940
Wyndham Hotels Resorts 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Wyndham Hotels Resorts are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Wyndham Hotels unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9095100105

Gaming Realms and Wyndham Hotels Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.54-6.39-4.25-2.110.03572.154.366.588.811.02 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15GMR 0YTR
       Returns  

Pair Trading with Gaming Realms and Wyndham Hotels

The main advantage of trading using opposite Gaming Realms and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Realms position performs unexpectedly, Wyndham Hotels 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.
The idea behind Gaming Realms plc and Wyndham Hotels Resorts 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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