Correlation Between Compagnie Plastic and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Hyatt Hotels, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Hyatt Hotels.
Diversification Opportunities for Compagnie Plastic and Hyatt Hotels
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Compagnie and Hyatt is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Hyatt Hotels
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Hyatt Hotels. In addition to that, Compagnie Plastic is 1.32 times more volatile than Hyatt Hotels. It trades about -0.01 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.07 per unit of volatility. If you would invest 8,326 in Hyatt Hotels on September 25, 2024 and sell it today you would earn a total of 6,524 from holding Hyatt Hotels or generate 78.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Compagnie Plastic Omnium vs. Hyatt Hotels
Performance |
Timeline |
Compagnie Plastic Omnium |
Hyatt Hotels |
Compagnie Plastic and Hyatt Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compagnie Plastic and Hyatt Hotels
The main advantage of trading using opposite Compagnie Plastic and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. DENSO P ADR | Compagnie Plastic vs. Aptiv PLC | Compagnie Plastic vs. PT Astra International |
Hyatt Hotels vs. BLUESCOPE STEEL | Hyatt Hotels vs. MELIA HOTELS | Hyatt Hotels vs. Sunstone Hotel Investors | Hyatt Hotels vs. Wyndham Hotels Resorts |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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