Correlation Between AEON STORES and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both AEON STORES 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 AEON STORES and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEON STORES and Playa Hotels Resorts, you can compare the effects of market volatilities on AEON STORES 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 AEON STORES with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON STORES and Playa Hotels.
Diversification Opportunities for AEON STORES and Playa Hotels
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AEON and Playa is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding AEON STORES 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 AEON STORES 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 AEON STORES 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 AEON STORES i.e., AEON STORES and Playa Hotels go up and down completely randomly.
Pair Corralation between AEON STORES and Playa Hotels
If you would invest 5.90 in AEON STORES on November 3, 2024 and sell it today you would earn a total of 0.00 from holding AEON STORES or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEON STORES vs. Playa Hotels Resorts
Performance |
| Timeline |
| AEON STORES |
| Playa Hotels Resorts |
AEON STORES and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEON STORES and Playa Hotels
The main advantage of trading using opposite AEON STORES and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON STORES 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.| AEON STORES vs. Renesas Electronics | AEON STORES vs. TT Electronics PLC | AEON STORES vs. ARROW ELECTRONICS | AEON STORES vs. LG Electronics |
| Playa Hotels vs. UNITED RENTALS | Playa Hotels vs. LOANDEPOT INC A | Playa Hotels vs. Global Ship Lease | Playa Hotels vs. PATTIES FOODS |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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