Correlation Between GreenTree Hospitality and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality and Hyatt 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 GreenTree Hospitality and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and Hyatt Hotels, you can compare the effects of market volatilities on GreenTree Hospitality and Hyatt 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 GreenTree Hospitality with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and Hyatt Hotels.
Diversification Opportunities for GreenTree Hospitality and Hyatt Hotels
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GreenTree and Hyatt is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and GreenTree Hospitality 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 GreenTree Hospitality Group are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and Hyatt Hotels go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and Hyatt Hotels
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the Hyatt Hotels. In addition to that, GreenTree Hospitality is 1.65 times more volatile than Hyatt Hotels. It trades about -0.18 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about -0.12 per unit of volatility. If you would invest 15,612 in Hyatt Hotels on January 16, 2024 and sell it today you would lose (412.00) from holding Hyatt Hotels or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. Hyatt Hotels
Performance |
| Timeline |
| GreenTree Hospitality |
| Hyatt Hotels |
GreenTree Hospitality and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and Hyatt Hotels
The main advantage of trading using opposite GreenTree Hospitality and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality position performs unexpectedly, Hyatt 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| GreenTree Hospitality vs. Yatra Online | GreenTree Hospitality vs. Despegar Corp | GreenTree Hospitality vs. Mondee Holdings | GreenTree Hospitality vs. MakeMyTrip Limited |
| Hyatt Hotels vs. Yatra Online | Hyatt Hotels vs. Despegar Corp | Hyatt Hotels vs. Mondee Holdings | Hyatt Hotels vs. MakeMyTrip Limited |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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