Correlation Between Park Hotels and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on Park Hotels and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Dalata Hotel.
Diversification Opportunities for Park Hotels and Dalata Hotel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and Dalata is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Park Hotels i.e., Park Hotels and Dalata Hotel go up and down completely randomly.
Pair Corralation between Park Hotels and Dalata Hotel
Assuming the 90 days trading horizon Park Hotels is expected to generate 2.86 times less return on investment than Dalata Hotel. But when comparing it to its historical volatility, Park Hotels Resorts is 1.12 times less risky than Dalata Hotel. It trades about 0.01 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 35,376 in Dalata Hotel Group on September 2, 2024 and sell it today you would earn a total of 2,124 from holding Dalata Hotel Group or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Park Hotels Resorts vs. Dalata Hotel Group
Performance |
| Timeline |
| Park Hotels Resorts |
| Dalata Hotel Group |
Park Hotels and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Dalata Hotel
The main advantage of trading using opposite Park Hotels and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Park Hotels vs. Uniper SE | Park Hotels vs. Mulberry Group PLC | Park Hotels vs. London Security Plc | Park Hotels vs. Triad Group PLC |
| Dalata Hotel vs. Odfjell Drilling | Dalata Hotel vs. Sabien Technology Group | Dalata Hotel vs. Eastman Chemical Co | Dalata Hotel vs. Vitec Software Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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