Correlation Between Park Hotels and PT Bank
Can any of the company-specific risk be diversified away by investing in both Park Hotels and PT Bank 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 Park Hotels and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Hotels Resorts and PT Bank Maybank, you can compare the effects of market volatilities on Park Hotels and PT Bank 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 Park Hotels with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and PT Bank.
Diversification Opportunities for Park Hotels and PT Bank
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and BOZA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank and Park Hotels 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 Park Hotels Resorts are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Maybank has no effect on the direction of Park Hotels i.e., Park Hotels and PT Bank go up and down completely randomly.
Pair Corralation between Park Hotels and PT Bank
Assuming the 90 days horizon Park Hotels Resorts is expected to generate 0.44 times more return on investment than PT Bank. However, Park Hotels Resorts is 2.25 times less risky than PT Bank. It trades about 0.06 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.02 per unit of risk. If you would invest 884.00 in Park Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 596.00 from holding Park Hotels Resorts or generate 67.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. PT Bank Maybank
Performance |
| Timeline |
| Park Hotels Resorts |
| PT Bank Maybank |
Park Hotels and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and PT Bank
The main advantage of trading using opposite Park Hotels and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Park Hotels vs. Host Hotels Resorts | Park Hotels vs. Sunstone Hotel Investors | Park Hotels vs. Xenia Hotels Resorts | Park Hotels vs. Summit Hotel Properties |
| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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