Correlation Between Red Lion and Marriott International
Can any of the company-specific risk be diversified away by investing in both Red Lion 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 Red Lion and Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Lion Hotels and Marriott International, you can compare the effects of market volatilities on Red Lion 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 Red Lion with a short position of Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Lion and Marriott International.
Diversification Opportunities for Red Lion and Marriott International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Red and Marriott is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Red Lion Hotels and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and Red Lion 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 Red Lion Hotels 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 Red Lion i.e., Red Lion and Marriott International go up and down completely randomly.
Pair Corralation between Red Lion and Marriott International
If you would invest (100.00) in Red Lion Hotels on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Red Lion Hotels or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Red Lion Hotels vs. Marriott International
Performance |
| Timeline |
| Red Lion Hotels |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marriott International |
Red Lion and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Lion and Marriott International
The main advantage of trading using opposite Red Lion and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Lion 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.| Red Lion vs. Qorvo Inc | Red Lion vs. Portland General Electric | Red Lion vs. Kenon Holdings | Red Lion vs. Intchains Group Limited |
| Marriott International vs. Yatra Online | Marriott International vs. Despegar Corp | Marriott International vs. Mondee Holdings | Marriott International 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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