Correlation Between Pinstripes Holdings and Huazhu

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

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

Diversification Opportunities for Pinstripes Holdings and Huazhu

-0.1

Correlation Coefficient

Pinstripes Holdings  Huazhu

Good diversification

The 3 months correlation between Pinstripes and Huazhu is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pinstripes Holdings and Huazhu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huazhu Group and Pinstripes 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 Pinstripes Holdings are associated (or correlated) with Huazhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huazhu Group has no effect on the direction of Pinstripes Holdings i.e., Pinstripes Holdings and Huazhu go up and down completely randomly.

Pair Corralation between Pinstripes Holdings and Huazhu

Given the investment horizon of 90 days Pinstripes Holdings is expected to under-perform the Huazhu. In addition to that, Pinstripes Holdings is 3.42 times more volatile than Huazhu Group. It trades about -0.16 of its total potential returns per unit of risk. Huazhu Group is currently generating about 0.07 per unit of volatility. If you would invest  3,299  in Huazhu Group on December 4, 2024 and sell it today you would earn a total of  333.00  from holding Huazhu Group or generate 10.09% return on investment over 90 days.

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

Pinstripes Holdings  vs.  Huazhu Group

Pinstripes Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pinstripes Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Huazhu Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Huazhu Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, Huazhu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pinstripes Holdings and Huazhu

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

The idea behind Pinstripes Holdings and Huazhu 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.