Correlation Between FormFactor and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both FormFactor 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 FormFactor and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormFactor and Playa Hotels Resorts, you can compare the effects of market volatilities on FormFactor 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 FormFactor with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormFactor and Playa Hotels.
Diversification Opportunities for FormFactor and Playa Hotels
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between FormFactor and Playa is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor 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 FormFactor 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 FormFactor 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 FormFactor i.e., FormFactor and Playa Hotels go up and down completely randomly.
Pair Corralation between FormFactor and Playa Hotels
Given the investment horizon of 90 days FormFactor is expected to under-perform the Playa Hotels. In addition to that, FormFactor is 2.73 times more volatile than Playa Hotels Resorts. It trades about -0.15 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.36 per unit of volatility. If you would invest 1,227 in Playa Hotels Resorts on November 28, 2024 and sell it today you would earn a total of 104.00 from holding Playa Hotels Resorts or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormFactor vs. Playa Hotels Resorts
Performance |
| Timeline |
| FormFactor |
| Playa Hotels Resorts |
FormFactor and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormFactor and Playa Hotels
The main advantage of trading using opposite FormFactor and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormFactor 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.| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
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.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |