Correlation Between Chemours and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Chemours 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 Chemours and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Playa Hotels Resorts, you can compare the effects of market volatilities on Chemours 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 Chemours with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Playa Hotels.
Diversification Opportunities for Chemours and Playa Hotels
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chemours and Playa is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co 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 Chemours 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 Chemours Co 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 Chemours i.e., Chemours and Playa Hotels go up and down completely randomly.
Pair Corralation between Chemours and Playa Hotels
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.99 times more return on investment than Playa Hotels. However, Chemours is 1.99 times more volatile than Playa Hotels Resorts. It trades about 0.17 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.25 per unit of risk. If you would invest 1,808 in Chemours Co on August 26, 2024 and sell it today you would earn a total of 272.00 from holding Chemours Co or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Playa Hotels Resorts
Performance |
| Timeline |
| Chemours |
| Playa Hotels Resorts |
Chemours and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Playa Hotels
The main advantage of trading using opposite Chemours and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours 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.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| Playa Hotels vs. Yatra Online | Playa Hotels vs. Despegar Corp | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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