Correlation Between GreenTree Hospitality and Marriott International
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality and Marriott International 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 GreenTree Hospitality and Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and Marriott International, you can compare the effects of market volatilities on GreenTree Hospitality and Marriott International 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 GreenTree Hospitality with a short position of Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and Marriott International.
Diversification Opportunities for GreenTree Hospitality and Marriott International
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GreenTree and Marriott is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and GreenTree Hospitality 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 GreenTree Hospitality Group are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and Marriott International go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and Marriott International
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the Marriott International. In addition to that, GreenTree Hospitality is 1.88 times more volatile than Marriott International. It trades about -0.08 of its total potential returns per unit of risk. Marriott International is currently generating about 0.0 per unit of volatility. If you would invest 23,738 in Marriott International on January 20, 2024 and sell it today you would lose (108.00) from holding Marriott International or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. Marriott International
Performance |
| Timeline |
| GreenTree Hospitality |
| Marriott International |
GreenTree Hospitality and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and Marriott International
The main advantage of trading using opposite GreenTree Hospitality and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality position performs unexpectedly, Marriott International 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 Marriott International will offset losses from the drop in Marriott International's long position.| GreenTree Hospitality vs. Yatra Online | GreenTree Hospitality vs. Despegar Corp | GreenTree Hospitality vs. Mondee Holdings | GreenTree Hospitality vs. MakeMyTrip Limited |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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