Correlation Between Park Hotels and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Gaztransport 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 Gaztransport 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 Gaztransport et Technigaz, you can compare the effects of market volatilities on Park Hotels and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Gaztransport.
Diversification Opportunities for Park Hotels and Gaztransport
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Park and Gaztransport is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Park Hotels i.e., Park Hotels and Gaztransport go up and down completely randomly.
Pair Corralation between Park Hotels and Gaztransport
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 1.25 times more return on investment than Gaztransport. However, Park Hotels is 1.25 times more volatile than Gaztransport et Technigaz. It trades about 0.04 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.04 per unit of risk. If you would invest 1,316 in Park Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 219.00 from holding Park Hotels Resorts or generate 16.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Park Hotels Resorts vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Park Hotels Resorts |
| Gaztransport et Technigaz |
Park Hotels and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Gaztransport
The main advantage of trading using opposite Park Hotels and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Park Hotels vs. Silvercorp Metals | Park Hotels vs. Synthomer plc | Park Hotels vs. Home Depot | Park Hotels vs. Empire Metals Limited |
| Gaztransport vs. Park Hotels Resorts | Gaztransport vs. Ross Stores | Gaztransport vs. Melia Hotels | Gaztransport vs. Silvercorp Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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