Correlation Between Canlan Ice and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Park Hotels Resorts, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Park Hotels.
Diversification Opportunities for Canlan Ice and Park Hotels
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canlan and Park is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports 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 Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Park Hotels go up and down completely randomly.
Pair Corralation between Canlan Ice and Park Hotels
Assuming the 90 days horizon Canlan Ice is expected to generate 2.93 times less return on investment than Park Hotels. But when comparing it to its historical volatility, Canlan Ice Sports is 15.03 times less risky than Park Hotels. It trades about 0.13 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,169 in Park Hotels Resorts on October 25, 2024 and sell it today you would earn a total of 204.00 from holding Park Hotels Resorts or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Park Hotels Resorts
Performance |
| Timeline |
| Canlan Ice Sports |
| Park Hotels Resorts |
Canlan Ice and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Park Hotels
The main advantage of trading using opposite Canlan Ice and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. Eldorado Gold Corp | Canlan Ice vs. Tyson Foods | Canlan Ice vs. Lion One Metals | Canlan Ice vs. Griffon |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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