Correlation Between Atour Lifestyle and Wyndham Hotels
Can any of the company-specific risk be diversified away by investing in both Atour Lifestyle 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 Atour Lifestyle and Wyndham Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atour Lifestyle Holdings and Wyndham Hotels Resorts, you can compare the effects of market volatilities on Atour Lifestyle 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 Atour Lifestyle with a short position of Wyndham Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atour Lifestyle and Wyndham Hotels.
Diversification Opportunities for Atour Lifestyle and Wyndham Hotels
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atour and Wyndham is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Atour Lifestyle Holdings 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 Atour Lifestyle 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 Atour Lifestyle Holdings 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 Atour Lifestyle i.e., Atour Lifestyle and Wyndham Hotels go up and down completely randomly.
Pair Corralation between Atour Lifestyle and Wyndham Hotels
Given the investment horizon of 90 days Atour Lifestyle Holdings is expected to generate 1.32 times more return on investment than Wyndham Hotels. However, Atour Lifestyle is 1.32 times more volatile than Wyndham Hotels Resorts. It trades about 0.13 of its potential returns per unit of risk. Wyndham Hotels Resorts is currently generating about 0.03 per unit of risk. If you would invest 1,821 in Atour Lifestyle Holdings on February 4, 2024 and sell it today you would earn a total of 104.00 from holding Atour Lifestyle Holdings or generate 5.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Atour Lifestyle Holdings vs. Wyndham Hotels Resorts
Performance |
Timeline |
Atour Lifestyle Holdings |
Wyndham Hotels Resorts |
Atour Lifestyle and Wyndham Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Atour Lifestyle and Wyndham Hotels
The main advantage of trading using opposite Atour Lifestyle and Wyndham Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atour Lifestyle 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.Atour Lifestyle vs. Yatra Online | Atour Lifestyle vs. Despegar Corp | Atour Lifestyle vs. Mondee Holdings | Atour Lifestyle vs. MakeMyTrip Limited |
Wyndham Hotels vs. Yatra Online | Wyndham Hotels vs. Despegar Corp | Wyndham Hotels vs. Mondee Holdings | Wyndham 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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