Correlation Between WIZZ AIR and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both WIZZ AIR and Wyndham Hotels 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 WIZZ AIR and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIZZ AIR HLDGUNSPADR4 and Wyndham Hotels Resorts, you can compare the effects of market volatilities on WIZZ AIR and Wyndham Hotels 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 WIZZ AIR with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIZZ AIR and Wyndham Hotels.
Diversification Opportunities for WIZZ AIR and Wyndham Hotels
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WIZZ and Wyndham is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding WIZZ AIR HLDGUNSPADR4 and Wyndham Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wyndham Hotels Resorts and WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4 are associated (or correlated) with Wyndham Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wyndham Hotels Resorts has no effect on the direction of WIZZ AIR i.e., WIZZ AIR and Wyndham Hotels go up and down completely randomly.
Pair Corralation between WIZZ AIR and Wyndham Hotels
Assuming the 90 days trading horizon WIZZ AIR is expected to generate 2.16 times less return on investment than Wyndham Hotels. In addition to that, WIZZ AIR is 2.22 times more volatile than Wyndham Hotels Resorts. It trades about 0.05 of its total potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.23 per unit of volatility. If you would invest 7,072 in Wyndham Hotels Resorts on September 25, 2024 and sell it today you would earn a total of 2,478 from holding Wyndham Hotels Resorts or generate 35.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
WIZZ AIR HLDGUNSPADR4 vs. Wyndham Hotels Resorts
Performance |
Timeline |
WIZZ AIR HLDGUNSPADR4 |
Wyndham Hotels Resorts |
WIZZ AIR and Wyndham Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WIZZ AIR and Wyndham Hotels
The main advantage of trading using opposite WIZZ AIR and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIZZ AIR position performs unexpectedly, Wyndham Hotels 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 Wyndham Hotels will offset losses from the drop in Wyndham Hotels' long position.WIZZ AIR vs. AGF Management Limited | WIZZ AIR vs. Cleanaway Waste Management | WIZZ AIR vs. Ares Management Corp | WIZZ AIR vs. HYATT HOTELS A |
Wyndham Hotels vs. Marriott International | Wyndham Hotels vs. Hilton Worldwide Holdings | Wyndham Hotels vs. H World Group | Wyndham Hotels vs. Hyatt Hotels |
Check out your portfolio center.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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