Correlation Between JIAHUA STORES and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both JIAHUA 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 JIAHUA 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 JIAHUA STORES and Playa Hotels Resorts, you can compare the effects of market volatilities on JIAHUA 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 JIAHUA STORES with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of JIAHUA STORES and Playa Hotels.
Diversification Opportunities for JIAHUA STORES and Playa Hotels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JIAHUA and Playa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JIAHUA 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 JIAHUA 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 JIAHUA 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 JIAHUA STORES i.e., JIAHUA STORES and Playa Hotels go up and down completely randomly.
Pair Corralation between JIAHUA STORES and Playa Hotels
If you would invest 685.00 in Playa Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 235.00 from holding Playa Hotels Resorts or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
JIAHUA STORES vs. Playa Hotels Resorts
Performance |
| Timeline |
| JIAHUA STORES |
| Playa Hotels Resorts |
JIAHUA STORES and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JIAHUA STORES and Playa Hotels
The main advantage of trading using opposite JIAHUA STORES and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JIAHUA 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.| JIAHUA STORES vs. SIVERS SEMICONDUCTORS AB | JIAHUA STORES vs. Darden Restaurants | JIAHUA STORES vs. Reliance Steel Aluminum | JIAHUA STORES vs. Q2M Managementberatung AG |
| Playa Hotels vs. United States Steel | Playa Hotels vs. RELIANCE STEEL AL | Playa Hotels vs. Insteel Industries | Playa Hotels vs. TELES Informationstechnologien AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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