Correlation Between American Environmental and MARRIOTT

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

Diversification Opportunities for American Environmental and MARRIOTT

AmericanMARRIOTTDiversified AwayAmericanMARRIOTTDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between American and MARRIOTT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Environmental and MARRIOTT INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTERNATIONAL and American Environmental 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 American Environmental are associated (or correlated) with MARRIOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARRIOTT INTERNATIONAL has no effect on the direction of American Environmental i.e., American Environmental and MARRIOTT go up and down completely randomly.

Pair Corralation between American Environmental and MARRIOTT

If you would invest  0.01  in American Environmental on October 25, 2024 and sell it today you would earn a total of  0.00  from holding American Environmental or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy96.72%
ValuesDaily Returns

American Environmental  vs.  MARRIOTT INTERNATIONAL INC

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -2-1012
JavaScript chart by amCharts 3.21.15MZPS 571903BG7
       Timeline  
American Environmental 

Risk-Adjusted Performance

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Over the last 90 days American Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, American Environmental is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.00010.0001050.000110.000115
MARRIOTT INTERNATIONAL 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MARRIOTT INTERNATIONAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARRIOTT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.1530249022602378808284868890

American Environmental and MARRIOTT Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.51.01.5
JavaScript chart by amCharts 3.21.15MZPS 571903BG7
       Returns  

Pair Trading with American Environmental and MARRIOTT

The main advantage of trading using opposite American Environmental and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Environmental position performs unexpectedly, MARRIOTT 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 MARRIOTT will offset losses from the drop in MARRIOTT's long position.
The idea behind American Environmental and MARRIOTT INTERNATIONAL INC 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.

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