Correlation Between EON SE and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both EON SE 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 EON SE and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EON SE and Playa Hotels Resorts, you can compare the effects of market volatilities on EON SE 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 EON SE with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON SE and Playa Hotels.
Diversification Opportunities for EON SE and Playa Hotels
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EON and Playa is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding EON SE 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 EON SE 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 EON SE 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 EON SE i.e., EON SE and Playa Hotels go up and down completely randomly.
Pair Corralation between EON SE and Playa Hotels
Assuming the 90 days trading horizon EON SE is expected to generate 1.98 times less return on investment than Playa Hotels. But when comparing it to its historical volatility, EON SE is 1.16 times less risky than Playa Hotels. It trades about 0.08 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Playa Hotels Resorts on September 13, 2024 and sell it today you would earn a total of 35.00 from holding Playa Hotels Resorts or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EON SE vs. Playa Hotels Resorts
Performance |
| Timeline |
| EON SE |
| Playa Hotels Resorts |
EON SE and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EON SE and Playa Hotels
The main advantage of trading using opposite EON SE and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON SE 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.| EON SE vs. Constellation Software | EON SE vs. Park Hotels Resorts | EON SE vs. INTERCONT HOTELS | EON SE vs. PSI Software AG |
| Playa Hotels vs. Harmony Gold Mining | Playa Hotels vs. Vastned Retail NV | Playa Hotels vs. Lion One Metals | Playa Hotels vs. Fast Retailing Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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