Correlation Between Keck Seng and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Keck Seng and Choice 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 Keck Seng and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keck Seng Investments and Choice Hotels International, you can compare the effects of market volatilities on Keck Seng and Choice 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 Keck Seng with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and Choice Hotels.
Diversification Opportunities for Keck Seng and Choice Hotels
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Keck and Choice is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern and Keck Seng 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 Keck Seng Investments are associated (or correlated) with Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of Keck Seng i.e., Keck Seng and Choice Hotels go up and down completely randomly.
Pair Corralation between Keck Seng and Choice Hotels
Assuming the 90 days horizon Keck Seng Investments is expected to generate 3.58 times more return on investment than Choice Hotels. However, Keck Seng is 3.58 times more volatile than Choice Hotels International. It trades about 0.26 of its potential returns per unit of risk. Choice Hotels International is currently generating about -0.33 per unit of risk. If you would invest 25.00 in Keck Seng Investments on January 20, 2024 and sell it today you would earn a total of 8.00 from holding Keck Seng Investments or generate 32.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keck Seng Investments vs. Choice Hotels International
Performance |
| Timeline |
| Keck Seng Investments |
| Choice Hotels Intern |
Keck Seng and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keck Seng and Choice Hotels
The main advantage of trading using opposite Keck Seng and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng position performs unexpectedly, Choice 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| Keck Seng vs. Marriott International | Keck Seng vs. Hilton Worldwide Holdings | Keck Seng vs. InterContinental Hotels Group | Keck Seng vs. Choice Hotels International |
| Choice Hotels vs. Yatra Online | Choice Hotels vs. Despegar Corp | Choice Hotels vs. Mondee Holdings | Choice 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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