Correlation Between DAX Index and Playa Hotels
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By analyzing existing cross correlation between DAX Index and Playa Hotels Resorts, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Playa Hotels.
Diversification Opportunities for DAX Index and Playa Hotels
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Playa is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Playa Hotels go up and down completely randomly.
Pair Corralation between DAX Index and Playa Hotels
Assuming the 90 days trading horizon DAX Index is expected to generate 1.36 times less return on investment than Playa Hotels. But when comparing it to its historical volatility, DAX Index is 2.5 times less risky than Playa Hotels. It trades about 0.11 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Playa Hotels Resorts on August 25, 2024 and sell it today you would earn a total of 220.00 from holding Playa Hotels Resorts or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Playa Hotels Resorts
Performance |
| Timeline |
DAX Index and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Playa Hotels Resorts
Pair trading matchups for Playa Hotels
Pair Trading with DAX Index and Playa Hotels
The main advantage of trading using opposite DAX Index and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Salesforce | DAX Index vs. YATRA ONLINE DL 0001 | DAX Index vs. Ameriprise Financial | DAX Index vs. Mizuho Financial Group |
| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels vs. SIVERS SEMICONDUCTORS AB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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