Correlation Between Park Hotels and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Medical Properties 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 Park Hotels and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Hotels Resorts and Medical Properties Trust, you can compare the effects of market volatilities on Park Hotels and Medical Properties 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 Park Hotels with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Medical Properties.
Diversification Opportunities for Park Hotels and Medical Properties
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Park and Medical is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust and Park 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 Park Hotels Resorts are associated (or correlated) with Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of Park Hotels i.e., Park Hotels and Medical Properties go up and down completely randomly.
Pair Corralation between Park Hotels and Medical Properties
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 0.55 times more return on investment than Medical Properties. However, Park Hotels Resorts is 1.81 times less risky than Medical Properties. It trades about 0.02 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.0 per unit of risk. If you would invest 1,501 in Park Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Park Hotels Resorts or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Medical Properties Trust
Performance |
| Timeline |
| Park Hotels Resorts |
| Medical Properties Trust |
Park Hotels and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Medical Properties
The main advantage of trading using opposite Park Hotels and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| Park Hotels vs. Samsung Electronics Co | Park Hotels vs. Samsung Electronics Co | Park Hotels vs. Hyundai Motor | Park Hotels vs. Toyota Motor Corp |
| Medical Properties vs. Neometals | Medical Properties vs. Wheaton Precious Metals | Medical Properties vs. JB Hunt Transport | Medical Properties vs. Metals Exploration Plc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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