Correlation Between Sinclair Broadcast and MARRIOTT

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

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

Diversification Opportunities for Sinclair Broadcast and MARRIOTT

-0.31

Correlation Coefficient

Sinclair Broadcast  MARRIOTT

Very good diversification

The 3 months correlation between Sinclair and MARRIOTT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and MARRIOTT INTL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT INTL INC and Sinclair Broadcast 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 Sinclair Broadcast Group 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 INTL INC has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and MARRIOTT go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and MARRIOTT

Given the investment horizon of 90 days Sinclair Broadcast Group is expected to generate 11.38 times more return on investment than MARRIOTT. However, Sinclair Broadcast is 11.38 times more volatile than MARRIOTT INTL INC. It trades about 0.04 of its potential returns per unit of risk. MARRIOTT INTL INC is currently generating about 0.02 per unit of risk. If you would invest  1,579  in Sinclair Broadcast Group on December 25, 2024 and sell it today you would earn a total of  74.00  from holding Sinclair Broadcast Group or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.44%
Values	Daily Returns

Sinclair Broadcast Group  vs.  MARRIOTT INTL INC

Sinclair Broadcast

Risk-Adjusted Performance

Insignificant

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

MARRIOTT INTL INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MARRIOTT INTL INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MARRIOTT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sinclair Broadcast and MARRIOTT

The main advantage of trading using opposite Sinclair Broadcast and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast 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 Sinclair Broadcast Group and MARRIOTT INTL 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 Transaction History module to view history of all your transactions and understand their impact on performance.