Correlation Between Hyatt Hotels and Mondee Holdings

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

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

Diversification Opportunities for Hyatt Hotels and Mondee Holdings

-0.57

Correlation Coefficient

Hyatt Hotels  Mondee Holdings

Excellent diversification

The 3 months correlation between Hyatt and Mondee is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Mondee Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondee Holdings 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 Mondee Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondee Holdings has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Mondee Holdings go up and down completely randomly.

Pair Corralation between Hyatt Hotels and Mondee Holdings

Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 0.06 times more return on investment than Mondee Holdings. However, Hyatt Hotels is 17.21 times less risky than Mondee Holdings. It trades about 0.14 of its potential returns per unit of risk. Mondee Holdings is currently generating about -0.64 per unit of risk. If you would invest  15,279  in Hyatt Hotels on September 16, 2024 and sell it today you would earn a total of  620.00  from holding Hyatt Hotels or generate 4.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	76.19%
Values	Daily Returns

Hyatt Hotels  vs.  Mondee Holdings

Hyatt Hotels

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hyatt Hotels are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Hyatt Hotels may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hyatt Hotels and Mondee Holdings

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

The idea behind Hyatt Hotels and Mondee Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.