Correlation Between Mondee Holdings and GreenTree Hospitality

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

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

Diversification Opportunities for Mondee Holdings and GreenTree Hospitality

-0.12

Correlation Coefficient

Mondee Holdings  GreenTree Hospitality

Good diversification

The 3 months correlation between Mondee and GreenTree is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mondee Holdings and GreenTree Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTree Hospitality and Mondee Holdings 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 Mondee Holdings are associated (or correlated) with GreenTree Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTree Hospitality has no effect on the direction of Mondee Holdings i.e., Mondee Holdings and GreenTree Hospitality go up and down completely randomly.

Pair Corralation between Mondee Holdings and GreenTree Hospitality

Given the investment horizon of 90 days Mondee Holdings is expected to under-perform the GreenTree Hospitality. In addition to that, Mondee Holdings is 4.01 times more volatile than GreenTree Hospitality Group. It trades about -0.32 of its total potential returns per unit of risk. GreenTree Hospitality Group is currently generating about 0.04 per unit of volatility. If you would invest  235.00  in GreenTree Hospitality Group on September 13, 2024 and sell it today you would earn a total of  15.00  from holding GreenTree Hospitality Group or generate 6.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Mondee Holdings  vs.  GreenTree Hospitality Group

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.

GreenTree Hospitality

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GreenTree Hospitality Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, GreenTree Hospitality may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mondee Holdings and GreenTree Hospitality

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

The idea behind Mondee Holdings and GreenTree Hospitality Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.