Correlation Between GoldMining and Park Hotels
Can any of the company-specific risk be diversified away by investing in both GoldMining and Park Hotels 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 GoldMining and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Park Hotels Resorts, you can compare the effects of market volatilities on GoldMining and Park Hotels 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 GoldMining with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Park Hotels.
Diversification Opportunities for GoldMining and Park Hotels
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoldMining and Park is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts and GoldMining 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 GoldMining are associated (or correlated) with Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of GoldMining i.e., GoldMining and Park Hotels go up and down completely randomly.
Pair Corralation between GoldMining and Park Hotels
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Park Hotels. In addition to that, GoldMining is 1.79 times more volatile than Park Hotels Resorts. It trades about -0.06 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.09 per unit of volatility. If you would invest 1,453 in Park Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 86.00 from holding Park Hotels Resorts or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
GoldMining vs. Park Hotels Resorts
Performance |
| Timeline |
| GoldMining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Park Hotels Resorts |
GoldMining and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Park Hotels
The main advantage of trading using opposite GoldMining and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Toyota Motor Corp |
| Park Hotels vs. Samsung Electronics Co | Park Hotels vs. Samsung Electronics Co | Park Hotels vs. Hyundai Motor | Park Hotels vs. Toyota Motor Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |