Correlation Between Marriott International and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Marriott International 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 Marriott International and Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Choice Hotels International, you can compare the effects of market volatilities on Marriott International 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 Marriott International with a short position of Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Choice Hotels.
Diversification Opportunities for Marriott International and Choice Hotels
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marriott and Choice is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International 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 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 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 Marriott International i.e., Marriott International and Choice Hotels go up and down completely randomly.
Pair Corralation between Marriott International and Choice Hotels
Considering the 90-day investment horizon Marriott International is expected to generate 0.83 times more return on investment than Choice Hotels. However, Marriott International is 1.21 times less risky than Choice Hotels. It trades about -0.26 of its potential returns per unit of risk. Choice Hotels International is currently generating about -0.31 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. Choice Hotels International
Performance |
| Timeline |
| Marriott International |
| Choice Hotels Intern |
Marriott International and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Choice Hotels
The main advantage of trading using opposite Marriott International and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International 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.| Marriott International vs. Yatra Online | Marriott International vs. Despegar Corp | Marriott International vs. Mondee Holdings | Marriott International vs. MakeMyTrip Limited |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |