Correlation Between Marriott International and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Marriott International and Vanguard Emerging 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 Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and Vanguard Emerging Markets, you can compare the effects of market volatilities on Marriott International and Vanguard Emerging 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Vanguard Emerging.
Diversification Opportunities for Marriott International and Vanguard Emerging
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marriott and Vanguard is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Marriott International i.e., Marriott International and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Marriott International and Vanguard Emerging
Considering the 90-day investment horizon Marriott International is expected to under-perform the Vanguard Emerging. In addition to that, Marriott International is 2.11 times more volatile than Vanguard Emerging Markets. It trades about -0.1 of its total potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.01 per unit of volatility. If you would invest 3,467 in Vanguard Emerging Markets on January 25, 2024 and sell it today you would lose (7.00) from holding Vanguard Emerging Markets or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marriott International vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Marriott International |
| Vanguard Emerging Markets |
Marriott International and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marriott International and Vanguard Emerging
The main advantage of trading using opposite Marriott International and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging'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 |
| Vanguard Emerging vs. Amana Income Fund | Vanguard Emerging vs. Amana Growth Fund | Vanguard Emerging vs. Amana Participation Fund | Vanguard Emerging vs. HUMANA INC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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