Correlation Between Lowes Companies and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Lowes Companies 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 Lowes Companies and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Hyatt Hotels, you can compare the effects of market volatilities on Lowes Companies 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 Lowes Companies with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Hyatt Hotels.
Diversification Opportunities for Lowes Companies and Hyatt Hotels
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lowes and Hyatt is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Lowes Companies 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 Lowes Companies 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 Lowes Companies i.e., Lowes Companies and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Lowes Companies and Hyatt Hotels
Considering the 90-day investment horizon Lowes Companies is expected to generate 2.35 times less return on investment than Hyatt Hotels. But when comparing it to its historical volatility, Lowes Companies is 1.21 times less risky than Hyatt Hotels. It trades about 0.03 of its potential returns per unit of risk. Hyatt Hotels is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,378 in Hyatt Hotels on January 21, 2024 and sell it today you would earn a total of 5,259 from holding Hyatt Hotels or generate 56.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. Hyatt Hotels
Performance |
| Timeline |
| Lowes Companies |
| Hyatt Hotels |
Lowes Companies and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Hyatt Hotels
The main advantage of trading using opposite Lowes Companies and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies 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.| Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Kirklands | Lowes Companies vs. Live Ventures |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |