Correlation Between Grocery Outlet and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and Park Hotels Resorts, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and Park Hotels.
Diversification Opportunities for Grocery Outlet and Park Hotels
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grocery and Park is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding 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 Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and Park Hotels go up and down completely randomly.
Pair Corralation between Grocery Outlet and Park Hotels
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 2.59 times more return on investment than Park Hotels. However, Grocery Outlet is 2.59 times more volatile than Park Hotels Resorts. It trades about 0.17 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.16 per unit of risk. If you would invest 1,619 in Grocery Outlet Holding on September 3, 2024 and sell it today you would earn a total of 481.00 from holding Grocery Outlet Holding or generate 29.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. Park Hotels Resorts
Performance |
| Timeline |
| Grocery Outlet Holding |
| Park Hotels Resorts |
Grocery Outlet and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and Park Hotels
The main advantage of trading using opposite Grocery Outlet and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. RLJ Lodging Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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