Correlation Between Marriott International and GreenTree Hospitality
Can any of the company-specific risk be diversified away by investing in both Marriott International and GreenTree Hospitality 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 Marriott International and GreenTree Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and GreenTree Hospitality Group, you can compare the effects of market volatilities on Marriott International and GreenTree Hospitality 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 Marriott International with a short position of GreenTree Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and GreenTree Hospitality.
Diversification Opportunities for Marriott International and GreenTree Hospitality
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marriott and GreenTree is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and GreenTree Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTree Hospitality and Marriott International 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 Marriott International are associated (or correlated) with GreenTree Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTree Hospitality has no effect on the direction of Marriott International i.e., Marriott International and GreenTree Hospitality go up and down completely randomly.
Pair Corralation between Marriott International and GreenTree Hospitality
Considering the 90-day investment horizon Marriott International is expected to generate 0.6 times more return on investment than GreenTree Hospitality. However, Marriott International is 1.65 times less risky than GreenTree Hospitality. It trades about -0.26 of its potential returns per unit of risk. GreenTree Hospitality Group is currently generating about -0.36 per unit of risk. If you would invest 25,405 in Marriott International on January 20, 2024 and sell it today you would lose (1,775) from holding Marriott International or give up 6.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. GreenTree Hospitality Group
Performance |
| Timeline |
| Marriott International |
| GreenTree Hospitality |
Marriott International and GreenTree Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and GreenTree Hospitality
The main advantage of trading using opposite Marriott International and GreenTree Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, GreenTree Hospitality 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 GreenTree Hospitality will offset losses from the drop in GreenTree Hospitality's long position.| Marriott International vs. Yatra Online | Marriott International vs. Despegar Corp | Marriott International vs. Mondee Holdings | Marriott International vs. MakeMyTrip Limited |
| GreenTree Hospitality vs. Yatra Online | GreenTree Hospitality vs. Despegar Corp | GreenTree Hospitality vs. Mondee Holdings | GreenTree Hospitality 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |