Correlation Between Park Hotels and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Park Hotels and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Park Hotels and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and KIMBALL ELECTRONICS.
Diversification Opportunities for Park Hotels and KIMBALL ELECTRONICS
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and KIMBALL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of Park Hotels i.e., Park Hotels and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Park Hotels and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 0.62 times more return on investment than KIMBALL ELECTRONICS. However, Park Hotels Resorts is 1.6 times less risky than KIMBALL ELECTRONICS. It trades about 0.23 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.14 per unit of risk. If you would invest 1,270 in Park Hotels Resorts on August 30, 2024 and sell it today you would earn a total of 180.00 from holding Park Hotels Resorts or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Park Hotels Resorts |
| KIMBALL ELECTRONICS |
Park Hotels and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and KIMBALL ELECTRONICS
The main advantage of trading using opposite Park Hotels and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc |
| KIMBALL ELECTRONICS vs. Superior Plus Corp | KIMBALL ELECTRONICS vs. SIVERS SEMICONDUCTORS AB | KIMBALL ELECTRONICS vs. Talanx AG | KIMBALL ELECTRONICS vs. 2G ENERGY |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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