Correlation Between Dalata Hotel and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel 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 Dalata Hotel and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and Park Hotels Resorts, you can compare the effects of market volatilities on Dalata Hotel 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 Dalata Hotel with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and Park Hotels.
Diversification Opportunities for Dalata Hotel and Park Hotels
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalata and Park is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group 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 Dalata Hotel 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 Dalata Hotel Group 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 Dalata Hotel i.e., Dalata Hotel and Park Hotels go up and down completely randomly.
Pair Corralation between Dalata Hotel and Park Hotels
Assuming the 90 days trading horizon Dalata Hotel Group is expected to generate 1.12 times more return on investment than Park Hotels. However, Dalata Hotel is 1.12 times more volatile than Park Hotels Resorts. It trades about 0.03 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.01 per unit of risk. If you would invest 35,376 in Dalata Hotel Group on September 2, 2024 and sell it today you would earn a total of 2,124 from holding Dalata Hotel Group or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Dalata Hotel Group vs. Park Hotels Resorts
Performance |
| Timeline |
| Dalata Hotel Group |
| Park Hotels Resorts |
Dalata Hotel and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and Park Hotels
The main advantage of trading using opposite Dalata Hotel and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel 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.| Dalata Hotel vs. Odfjell Drilling | Dalata Hotel vs. Sabien Technology Group | Dalata Hotel vs. Eastman Chemical Co | Dalata Hotel vs. Vitec Software Group |
| Park Hotels vs. Uniper SE | Park Hotels vs. Mulberry Group PLC | Park Hotels vs. London Security Plc | Park Hotels vs. Triad Group PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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