Correlation Between Park Hotels and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Park Hotels and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on Park Hotels and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and TIMES CHINA.
Diversification Opportunities for Park Hotels and TIMES CHINA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Park and TIMES is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Park Hotels i.e., Park Hotels and TIMES CHINA go up and down completely randomly.
Pair Corralation between Park Hotels and TIMES CHINA
Assuming the 90 days trading horizon Park Hotels Resorts is expected to generate 0.38 times more return on investment than TIMES CHINA. However, Park Hotels Resorts is 2.65 times less risky than TIMES CHINA. It trades about -0.09 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.18 per unit of risk. If you would invest 1,341 in Park Hotels Resorts on October 23, 2024 and sell it today you would lose (41.00) from holding Park Hotels Resorts or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Park Hotels Resorts vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| Park Hotels Resorts |
| TIMES CHINA HLDGS |
Park Hotels and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and TIMES CHINA
The main advantage of trading using opposite Park Hotels and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| Park Hotels vs. GungHo Online Entertainment | Park Hotels vs. CEOTRONICS | Park Hotels vs. Perdoceo Education | Park Hotels vs. Tencent Music Entertainment |
| TIMES CHINA vs. Park Hotels Resorts | TIMES CHINA vs. Delta Electronics Public | TIMES CHINA vs. Nanjing Panda Electronics | TIMES CHINA vs. ELECTRONIC ARTS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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