Correlation Between Marriott International and Intel
Can any of the company-specific risk be diversified away by investing in both Marriott International and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Intel, you can compare the effects of market volatilities on Marriott International and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Intel.
Diversification Opportunities for Marriott International and Intel
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marriott and Intel is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Marriott International i.e., Marriott International and Intel go up and down completely randomly.
Pair Corralation between Marriott International and Intel
Considering the 90-day investment horizon Marriott International is expected to generate 0.5 times more return on investment than Intel. However, Marriott International is 1.98 times less risky than Intel. It trades about -0.1 of its potential returns per unit of risk. Intel is currently generating about -0.31 per unit of risk. If you would invest 25,211 in Marriott International on January 25, 2024 and sell it today you would lose (791.50) from holding Marriott International or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. Intel
Performance |
| Timeline |
| Marriott International |
| Intel |
Marriott International and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Intel
The main advantage of trading using opposite Marriott International and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. Choice Hotels International | Marriott International vs. Wyndham Hotels Resorts |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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