Correlation Between Tortoise Capital and MARRIOTT

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

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

Diversification Opportunities for Tortoise Capital and MARRIOTT

-0.43

Correlation Coefficient

Tortoise Capital  MARRIOTT

Very good diversification

The 3 months correlation between Tortoise and MARRIOTT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tortoise Capital Series 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 Tortoise Capital 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 Tortoise Capital Series 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 Tortoise Capital i.e., Tortoise Capital and MARRIOTT go up and down completely randomly.

Pair Corralation between Tortoise Capital and MARRIOTT

Considering the 90-day investment horizon Tortoise Capital Series is expected to generate 0.56 times more return on investment than MARRIOTT. However, Tortoise Capital Series is 1.77 times less risky than MARRIOTT. It trades about -0.21 of its potential returns per unit of risk. MARRIOTT INTL INC is currently generating about -0.31 per unit of risk. If you would invest  2,054  in Tortoise Capital Series on September 24, 2024 and sell it today you would lose (81.00) from holding Tortoise Capital Series or give up 3.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.0%
Values	Daily Returns

Tortoise Capital Series  vs.  MARRIOTT INTL INC

Tortoise Capital Series

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise Capital Series are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile basic indicators, Tortoise Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MARRIOTT INTL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARRIOTT INTL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for MARRIOTT INTL INC investors.

Pair Trading with Tortoise Capital and MARRIOTT

The main advantage of trading using opposite Tortoise Capital and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tortoise Capital 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 Tortoise Capital Series 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.