Correlation Between Martifer SGPS and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Martifer SGPS 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 Martifer SGPS and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martifer SGPS SA and Playa Hotels Resorts, you can compare the effects of market volatilities on Martifer SGPS 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 Martifer SGPS with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martifer SGPS and Playa Hotels.
Diversification Opportunities for Martifer SGPS and Playa Hotels
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martifer and Playa is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Martifer SGPS SA 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 Martifer SGPS 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 Martifer SGPS SA 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 Martifer SGPS i.e., Martifer SGPS and Playa Hotels go up and down completely randomly.
Pair Corralation between Martifer SGPS and Playa Hotels
Assuming the 90 days horizon Martifer SGPS is expected to generate 11.99 times less return on investment than Playa Hotels. But when comparing it to its historical volatility, Martifer SGPS SA is 1.73 times less risky than Playa Hotels. It trades about 0.04 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 900.00 in Playa Hotels Resorts on September 15, 2024 and sell it today you would earn a total of 70.00 from holding Playa Hotels Resorts or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martifer SGPS SA vs. Playa Hotels Resorts
Performance |
| Timeline |
| Martifer SGPS SA |
| Playa Hotels Resorts |
Martifer SGPS and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martifer SGPS and Playa Hotels
The main advantage of trading using opposite Martifer SGPS and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martifer SGPS 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.| Martifer SGPS vs. Playa Hotels Resorts | Martifer SGPS vs. MCEWEN MINING INC | Martifer SGPS vs. KOOL2PLAY SA ZY | Martifer SGPS vs. CSSC Offshore Marine |
| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. SIVERS SEMICONDUCTORS AB | Playa Hotels vs. Norsk Hydro ASA | Playa Hotels vs. Reliance Steel Aluminum |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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