Correlation Between Park Hotels and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Telecom Argentina 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 Telecom Argentina 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 Telecom Argentina SA, you can compare the effects of market volatilities on Park Hotels and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Telecom Argentina.
Diversification Opportunities for Park Hotels and Telecom Argentina
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and Telecom is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Park Hotels i.e., Park Hotels and Telecom Argentina go up and down completely randomly.
Pair Corralation between Park Hotels and Telecom Argentina
Assuming the 90 days trading horizon Park Hotels is expected to generate 10.04 times less return on investment than Telecom Argentina. But when comparing it to its historical volatility, Park Hotels Resorts is 1.93 times less risky than Telecom Argentina. It trades about 0.04 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 501.00 in Telecom Argentina SA on November 3, 2024 and sell it today you would earn a total of 669.00 from holding Telecom Argentina SA or generate 133.53% 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. Telecom Argentina SA
Performance |
| Timeline |
| Park Hotels Resorts |
| Telecom Argentina |
Park Hotels and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Telecom Argentina
The main advantage of trading using opposite Park Hotels and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| Park Hotels vs. Zijin Mining Group | Park Hotels vs. ANTA SPORTS PRODUCT | Park Hotels vs. Playa Hotels Resorts | Park Hotels vs. InPlay Oil Corp |
| Telecom Argentina vs. T Mobile | Telecom Argentina vs. China Mobile Limited | Telecom Argentina vs. Verizon Communications | Telecom Argentina vs. ATT Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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