Correlation Between FC Investment and Park Hotels
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Park Hotels Resorts, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Park Hotels.
Diversification Opportunities for FC Investment and Park Hotels
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FCIT and Park is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Park Hotels go up and down completely randomly.
Pair Corralation between FC Investment and Park Hotels
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.41 times more return on investment than Park Hotels. However, FC Investment Trust is 2.42 times less risky than Park Hotels. It trades about 0.12 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.04 per unit of risk. If you would invest 88,547 in FC Investment Trust on September 2, 2024 and sell it today you would earn a total of 23,653 from holding FC Investment Trust or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Park Hotels Resorts
Performance |
| Timeline |
| FC Investment Trust |
| Park Hotels Resorts |
FC Investment and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Park Hotels
The main advantage of trading using opposite FC Investment and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. Toyota Motor Corp | FC Investment vs. SoftBank Group Corp | FC Investment vs. OTP Bank Nyrt | FC Investment vs. Las Vegas Sands |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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