Correlation Between Chia and MARRIOTT

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

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

Diversification Opportunities for Chia and MARRIOTT

0.64

Correlation Coefficient

Chia  MARRIOTT

Poor diversification

The 3 months correlation between Chia and MARRIOTT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chia and MARRIOTT OWNERSHIP RESORTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARRIOTT OWNERSHIP and Chia 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 Chia 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 OWNERSHIP has no effect on the direction of Chia i.e., Chia and MARRIOTT go up and down completely randomly.

Pair Corralation between Chia and MARRIOTT

Assuming the 90 days trading horizon Chia is expected to under-perform the MARRIOTT. In addition to that, Chia is 10.74 times more volatile than MARRIOTT OWNERSHIP RESORTS. It trades about -0.18 of its total potential returns per unit of risk. MARRIOTT OWNERSHIP RESORTS is currently generating about -0.2 per unit of volatility. If you would invest  9,722  in MARRIOTT OWNERSHIP RESORTS on October 11, 2024 and sell it today you would lose (199.00) from holding MARRIOTT OWNERSHIP RESORTS or give up 2.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Chia  vs.  MARRIOTT OWNERSHIP RESORTS

Chia

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

MARRIOTT OWNERSHIP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARRIOTT OWNERSHIP RESORTS 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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chia and MARRIOTT

The main advantage of trading using opposite Chia and MARRIOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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 Chia and MARRIOTT OWNERSHIP RESORTS 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.