Correlation Between Power Assets and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Power Assets 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 Power Assets and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Assets Holdings and Park Hotels Resorts, you can compare the effects of market volatilities on Power Assets 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 Power Assets with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Assets and Park Hotels.
Diversification Opportunities for Power Assets and Park Hotels
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Power and Park is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Power Assets Holdings 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 Power Assets 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 Power Assets Holdings 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 Power Assets i.e., Power Assets and Park Hotels go up and down completely randomly.
Pair Corralation between Power Assets and Park Hotels
Assuming the 90 days horizon Power Assets Holdings is expected to generate 0.62 times more return on investment than Park Hotels. However, Power Assets Holdings is 1.62 times less risky than Park Hotels. It trades about 0.02 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about -0.1 per unit of risk. If you would invest 615.00 in Power Assets Holdings on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Power Assets Holdings or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Assets Holdings vs. Park Hotels Resorts
Performance |
| Timeline |
| Power Assets Holdings |
| Park Hotels Resorts |
Power Assets and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Assets and Park Hotels
The main advantage of trading using opposite Power Assets and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Assets 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.| Power Assets vs. ZINC MEDIA GR | Power Assets vs. SBM OFFSHORE | Power Assets vs. CHINA SOUTHN AIR H | Power Assets vs. GigaMedia |
| Park Hotels vs. X FAB Silicon Foundries | Park Hotels vs. PKSHA TECHNOLOGY INC | Park Hotels vs. Sunny Optical Technology | Park Hotels vs. Lamar Advertising |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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