Correlation Between Macys and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Macys 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 Macys and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Hyatt Hotels, you can compare the effects of market volatilities on Macys 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 Macys with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Hyatt Hotels.
Diversification Opportunities for Macys and Hyatt Hotels
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macys and Hyatt is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Macys 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 Macys Inc 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 Macys i.e., Macys and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Macys and Hyatt Hotels
Taking into account the 90-day investment horizon Macys is expected to generate 5.87 times less return on investment than Hyatt Hotels. In addition to that, Macys is 1.64 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 0.05 per unit of volatility. If you would invest 9,378 in Hyatt Hotels on January 20, 2024 and sell it today you would earn a total of 5,402 from holding Hyatt Hotels or generate 57.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Hyatt Hotels
Performance |
| Timeline |
| Macys Inc |
| Hyatt Hotels |
Macys and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Hyatt Hotels
The main advantage of trading using opposite Macys and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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