Correlation Between Ramsay Générale and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Ramsay Générale 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 Ramsay Générale and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramsay Gnrale de and Park Hotels Resorts, you can compare the effects of market volatilities on Ramsay Générale 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 Ramsay Générale with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Générale and Park Hotels.
Diversification Opportunities for Ramsay Générale and Park Hotels
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ramsay and Park is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Gnrale de 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 Ramsay Générale 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 Ramsay Gnrale de 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 Ramsay Générale i.e., Ramsay Générale and Park Hotels go up and down completely randomly.
Pair Corralation between Ramsay Générale and Park Hotels
Assuming the 90 days horizon Ramsay Gnrale de is expected to generate 1.7 times more return on investment than Park Hotels. However, Ramsay Générale is 1.7 times more volatile than Park Hotels Resorts. It trades about 0.2 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about -0.03 per unit of risk. If you would invest 1,145 in Ramsay Gnrale de on October 20, 2024 and sell it today you would earn a total of 85.00 from holding Ramsay Gnrale de or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramsay Gnrale de vs. Park Hotels Resorts
Performance |
| Timeline |
| Ramsay Gnrale de |
| Park Hotels Resorts |
Ramsay Générale and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramsay Générale and Park Hotels
The main advantage of trading using opposite Ramsay Générale and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramsay Générale 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.| Ramsay Générale vs. SPORTING | Ramsay Générale vs. Autohome ADR | Ramsay Générale vs. CAIRN HOMES EO | Ramsay Générale vs. KENEDIX OFFICE INV |
| Park Hotels vs. Host Hotels Resorts | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors | Park Hotels vs. Xenia Hotels Resorts |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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