Correlation Between Park Hotels and Apple
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Park Hotels and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Apple.
Diversification Opportunities for Park Hotels and Apple
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Park and Apple is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Park Hotels i.e., Park Hotels and Apple go up and down completely randomly.
Pair Corralation between Park Hotels and Apple
Assuming the 90 days trading horizon Park Hotels is expected to generate 2.57 times less return on investment than Apple. In addition to that, Park Hotels is 1.59 times more volatile than Apple Inc. It trades about 0.02 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of volatility. If you would invest 13,859 in Apple Inc on November 19, 2024 and sell it today you would earn a total of 9,371 from holding Apple Inc or generate 67.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Apple Inc
Performance |
| Timeline |
| Park Hotels Resorts |
| Apple Inc |
Park Hotels and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Apple
The main advantage of trading using opposite Park Hotels and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Park Hotels vs. ARDAGH METAL PACDL 0001 | Park Hotels vs. SBM OFFSHORE | Park Hotels vs. De Grey Mining | Park Hotels vs. CVS Health |
| Apple vs. Strategic Education | Apple vs. IDP EDUCATION LTD | Apple vs. G8 EDUCATION | Apple vs. TAL Education Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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