Correlation Between Hyatt Hotels and MetLife
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and MetLife 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 Hyatt Hotels and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and MetLife, you can compare the effects of market volatilities on Hyatt Hotels and MetLife 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 Hyatt Hotels with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and MetLife.
Diversification Opportunities for Hyatt Hotels and MetLife
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyatt and MetLife is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Hyatt Hotels 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 Hyatt Hotels are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and MetLife go up and down completely randomly.
Pair Corralation between Hyatt Hotels and MetLife
Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 1.27 times more return on investment than MetLife. However, Hyatt Hotels is 1.27 times more volatile than MetLife. It trades about 0.06 of its potential returns per unit of risk. MetLife is currently generating about 0.03 per unit of risk. If you would invest 9,465 in Hyatt Hotels on January 25, 2024 and sell it today you would earn a total of 5,738 from holding Hyatt Hotels or generate 60.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. MetLife
Performance |
| Timeline |
| Hyatt Hotels |
| MetLife |
Hyatt Hotels and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and MetLife
The main advantage of trading using opposite Hyatt Hotels and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| Hyatt Hotels vs. Choice Hotels International | Hyatt Hotels vs. Atour Lifestyle Holdings | Hyatt Hotels vs. GreenTree Hospitality Group |
| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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