Correlation Between Hyatt Hotels and Aterian

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

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

Diversification Opportunities for Hyatt Hotels and Aterian

0.16

Correlation Coefficient

Hyatt Hotels  Aterian

Average diversification

The 3 months correlation between Hyatt and Aterian is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Aterian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aterian and Hyatt 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 Hyatt Hotels are associated (or correlated) with Aterian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aterian has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Aterian go up and down completely randomly.

Pair Corralation between Hyatt Hotels and Aterian

Taking into account the 90-day investment horizon Hyatt Hotels is expected to under-perform the Aterian. But the stock apears to be less risky and, when comparing its historical volatility, Hyatt Hotels is 3.12 times less risky than Aterian. The stock trades about -0.18 of its potential returns per unit of risk. The Aterian is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  237.00  in Aterian on December 27, 2024 and sell it today you would lose (10.00) from holding Aterian or give up 4.22% of portfolio value over 90 days.

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

Hyatt Hotels  vs.  Aterian

Hyatt Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyatt Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Aterian

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aterian are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Aterian may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hyatt Hotels and Aterian

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

The idea behind Hyatt Hotels and Aterian 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.