Correlation Between Hilton Grand and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Hilton Grand 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 Hilton Grand and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Grand Vacations and Playa Hotels Resorts, you can compare the effects of market volatilities on Hilton Grand 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 Hilton Grand with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Grand and Playa Hotels.
Diversification Opportunities for Hilton Grand and Playa Hotels
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hilton and Playa is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations 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 Hilton Grand 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 Hilton Grand Vacations 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 Hilton Grand i.e., Hilton Grand and Playa Hotels go up and down completely randomly.
Pair Corralation between Hilton Grand and Playa Hotels
Considering the 90-day investment horizon Hilton Grand Vacations is expected to generate 1.21 times more return on investment than Playa Hotels. However, Hilton Grand is 1.21 times more volatile than Playa Hotels Resorts. It trades about 0.18 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.2 per unit of risk. If you would invest 3,785 in Hilton Grand Vacations on August 31, 2024 and sell it today you would earn a total of 389.00 from holding Hilton Grand Vacations or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Grand Vacations vs. Playa Hotels Resorts
Performance |
| Timeline |
| Hilton Grand Vacations |
| Playa Hotels Resorts |
Hilton Grand and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Grand and Playa Hotels
The main advantage of trading using opposite Hilton Grand and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Grand 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.| Hilton Grand vs. Vail Resorts | Hilton Grand vs. Monarch Casino Resort | Hilton Grand vs. Playa Hotels Resorts | Hilton Grand vs. Studio City International |
| Playa Hotels vs. Vail Resorts | Playa Hotels vs. Monarch Casino Resort | Playa Hotels vs. Hilton Grand Vacations | Playa Hotels vs. Full House 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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