Correlation Between Park Hotels and Givaudan
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Givaudan 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 Givaudan 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 Givaudan SA, you can compare the effects of market volatilities on Park Hotels and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Givaudan.
Diversification Opportunities for Park Hotels and Givaudan
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Park and Givaudan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Givaudan SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA has no effect on the direction of Park Hotels i.e., Park Hotels and Givaudan go up and down completely randomly.
Pair Corralation between Park Hotels and Givaudan
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 1.81 times more return on investment than Givaudan. However, Park Hotels is 1.81 times more volatile than Givaudan SA. It trades about 0.05 of its potential returns per unit of risk. Givaudan SA is currently generating about 0.07 per unit of risk. If you would invest 1,183 in Park Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 394.00 from holding Park Hotels Resorts or generate 33.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.05% |
| Values | Daily Returns |
Park Hotels Resorts vs. Givaudan SA
Performance |
| Timeline |
| Park Hotels Resorts |
| Givaudan SA |
Park Hotels and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Givaudan
The main advantage of trading using opposite Park Hotels and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Park Hotels vs. Hong Kong Land | Park Hotels vs. Neometals | Park Hotels vs. Coor Service Management | Park Hotels vs. Fidelity Sustainable USD |
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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 the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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