Correlation Between China BlueChemical and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both China BlueChemical 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 China BlueChemical and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Playa Hotels Resorts, you can compare the effects of market volatilities on China BlueChemical 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 China BlueChemical with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Playa Hotels.
Diversification Opportunities for China BlueChemical and Playa Hotels
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Playa is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical 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 China BlueChemical 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 China BlueChemical 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 China BlueChemical i.e., China BlueChemical and Playa Hotels go up and down completely randomly.
Pair Corralation between China BlueChemical and Playa Hotels
Assuming the 90 days horizon China BlueChemical is expected to generate 2.77 times more return on investment than Playa Hotels. However, China BlueChemical is 2.77 times more volatile than Playa Hotels Resorts. It trades about 0.02 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about -0.05 per unit of risk. If you would invest 26.00 in China BlueChemical on November 3, 2024 and sell it today you would earn a total of 0.00 from holding China BlueChemical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. Playa Hotels Resorts
Performance |
| Timeline |
| China BlueChemical |
| Playa Hotels Resorts |
China BlueChemical and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Playa Hotels
The main advantage of trading using opposite China BlueChemical and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical 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.| China BlueChemical vs. STMICROELECTRONICS | China BlueChemical vs. Richardson Electronics | China BlueChemical vs. TT Electronics PLC | China BlueChemical vs. UMC Electronics Co |
| Playa Hotels vs. UNITED RENTALS | Playa Hotels vs. LOANDEPOT INC A | Playa Hotels vs. Global Ship Lease | Playa Hotels vs. PATTIES FOODS |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |