Correlation Between Kibush Capital and Hyatt Hotels

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Can any of the company-specific risk be diversified away by investing in both Kibush Capital and Hyatt 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 Kibush Capital and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kibush Capital Corp and Hyatt Hotels, you can compare the effects of market volatilities on Kibush Capital and Hyatt 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 Kibush Capital with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kibush Capital and Hyatt Hotels.

Diversification Opportunities for Kibush Capital and Hyatt Hotels

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Kibush and Hyatt is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kibush Capital Corp and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Kibush Capital 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 Kibush Capital Corp are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Kibush Capital i.e., Kibush Capital and Hyatt Hotels go up and down completely randomly.

Pair Corralation between Kibush Capital and Hyatt Hotels

Given the investment horizon of 90 days Kibush Capital is expected to generate 3.44 times less return on investment than Hyatt Hotels. In addition to that, Kibush Capital is 5.73 times more volatile than Hyatt Hotels. It trades about 0.0 of its total potential returns per unit of risk. Hyatt Hotels is currently generating about 0.04 per unit of volatility. If you would invest  8,586  in Hyatt Hotels on September 5, 2022 and sell it today you would earn a total of  1,377  from holding Hyatt Hotels or generate 16.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Kibush Capital Corp  vs.  Hyatt Hotels

 Performance (%) 
       Timeline  
Kibush Capital Corp 
Kibush Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kibush Capital Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Kibush Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Kibush Price Channel

Hyatt Hotels 
Hyatt Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hyatt Hotels are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Hyatt Hotels reported solid returns over the last few months and may actually be approaching a breakup point.

Hyatt Price Channel

Kibush Capital and Hyatt Hotels Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kibush Capital and Hyatt Hotels

The main advantage of trading using opposite Kibush Capital and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kibush Capital position performs unexpectedly, Hyatt 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.
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The idea behind Kibush Capital Corp and Hyatt Hotels pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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