Correlation Between International Game and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both International Game and Playa 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 International Game and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Playa Hotels Resorts, you can compare the effects of market volatilities on International Game and Playa 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 International Game with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Playa Hotels.
Diversification Opportunities for International Game and Playa Hotels
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Playa is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts and International Game 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 International Game Technology are associated (or correlated) with Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of International Game i.e., International Game and Playa Hotels go up and down completely randomly.
Pair Corralation between International Game and Playa Hotels
Assuming the 90 days horizon International Game is expected to generate 1.15 times less return on investment than Playa Hotels. In addition to that, International Game is 1.47 times more volatile than Playa Hotels Resorts. It trades about 0.13 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.22 per unit of volatility. If you would invest 1,180 in Playa Hotels Resorts on November 29, 2024 and sell it today you would earn a total of 80.00 from holding Playa Hotels Resorts or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Playa Hotels Resorts
Performance |
| Timeline |
| International Game |
| Playa Hotels Resorts |
International Game and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Playa Hotels
The main advantage of trading using opposite International Game and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Playa 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| International Game vs. SIERRA METALS | International Game vs. SHELF DRILLING LTD | International Game vs. Games Workshop Group | International Game vs. Jacquet Metal Service |
| Playa Hotels vs. SHELF DRILLING LTD | Playa Hotels vs. Pembina Pipeline Corp | Playa Hotels vs. Cal Maine Foods | Playa Hotels vs. China Modern Dairy |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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