Correlation Between Hyatt Hotels and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and Solstad Offshore 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 Hyatt Hotels and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and Solstad Offshore ASA, you can compare the effects of market volatilities on Hyatt Hotels and Solstad Offshore 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 Hyatt Hotels with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and Solstad Offshore.
Diversification Opportunities for Hyatt Hotels and Solstad Offshore
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyatt and Solstad is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Hyatt Hotels 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 Hyatt Hotels are associated (or correlated) with Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and Solstad Offshore go up and down completely randomly.
Pair Corralation between Hyatt Hotels and Solstad Offshore
Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 2.36 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Hyatt Hotels is 1.23 times less risky than Solstad Offshore. It trades about 0.07 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 258.00 in Solstad Offshore ASA on September 7, 2025 and sell it today you would earn a total of 51.00 from holding Solstad Offshore ASA or generate 19.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. Solstad Offshore ASA
Performance |
| Timeline |
| Hyatt Hotels |
| Solstad Offshore ASA |
Hyatt Hotels and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and Solstad Offshore
The main advantage of trading using opposite Hyatt Hotels and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Hyatt Hotels vs. EIH Limited | Hyatt Hotels vs. Target Hospitality Corp | Hyatt Hotels vs. Wyndham Hotels Resorts | Hyatt Hotels vs. Zhang Jia Jie |
| Solstad Offshore vs. Sekisui Chemical Co | Solstad Offshore vs. Earthworks Entertainment | Solstad Offshore vs. Park Electrochemical | Solstad Offshore vs. Eastman Chemical |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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