Correlation Between China Datang and Park Hotels
Can any of the company-specific risk be diversified away by investing in both China Datang 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 China Datang and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and Park Hotels Resorts, you can compare the effects of market volatilities on China Datang 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 China Datang with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Datang and Park Hotels.
Diversification Opportunities for China Datang and Park Hotels
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Park is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Datang 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 China Datang 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 China Datang 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 China Datang i.e., China Datang and Park Hotels go up and down completely randomly.
Pair Corralation between China Datang and Park Hotels
Assuming the 90 days horizon China Datang is expected to generate 0.94 times more return on investment than Park Hotels. However, China Datang is 1.06 times less risky than Park Hotels. It trades about 0.1 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.09 per unit of risk. If you would invest 23.00 in China Datang on September 13, 2024 and sell it today you would earn a total of 1.00 from holding China Datang or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Datang vs. Park Hotels Resorts
Performance |
| Timeline |
| China Datang |
| Park Hotels Resorts |
China Datang and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Datang and Park Hotels
The main advantage of trading using opposite China Datang and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Datang 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.| China Datang vs. FANDIFI TECHNOLOGY P | China Datang vs. Check Point Software | China Datang vs. Singapore Telecommunications Limited | China Datang vs. PKSHA TECHNOLOGY INC |
| Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stocks Directory Find actively traded stocks across global markets |