Correlation Between Park Hotels and Gaming Realms
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Gaming Realms 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 Gaming Realms 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 Gaming Realms plc, you can compare the effects of market volatilities on Park Hotels and Gaming Realms 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 Gaming Realms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Gaming Realms.
Diversification Opportunities for Park Hotels and Gaming Realms
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Park and Gaming is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Gaming Realms plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Realms plc 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 Gaming Realms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Realms plc has no effect on the direction of Park Hotels i.e., Park Hotels and Gaming Realms go up and down completely randomly.
Pair Corralation between Park Hotels and Gaming Realms
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 1.08 times more return on investment than Gaming Realms. However, Park Hotels is 1.08 times more volatile than Gaming Realms plc. It trades about 0.04 of its potential returns per unit of risk. Gaming Realms plc is currently generating about 0.03 per unit of risk. If you would invest 1,211 in Park Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 349.00 from holding Park Hotels Resorts or generate 28.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.9% |
| Values | Daily Returns |
Park Hotels Resorts vs. Gaming Realms plc
Performance |
| Timeline |
| Park Hotels Resorts |
| Gaming Realms plc |
Park Hotels and Gaming Realms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Gaming Realms
The main advantage of trading using opposite Park Hotels and Gaming Realms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Gaming Realms 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 Gaming Realms will offset losses from the drop in Gaming Realms' 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 |
| Gaming Realms vs. Viridian Therapeutics | Gaming Realms vs. CVR Energy | Gaming Realms vs. Nationwide Building Society | Gaming Realms vs. Dollar Tree |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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