Correlation Between Park Hotels and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Park Hotels and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on Park Hotels and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and SLR Investment.
Diversification Opportunities for Park Hotels and SLR Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Park and SLR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Park Hotels i.e., Park Hotels and SLR Investment go up and down completely randomly.
Pair Corralation between Park Hotels and SLR Investment
Assuming the 90 days trading horizon Park Hotels is expected to generate 2.09 times less return on investment than SLR Investment. In addition to that, Park Hotels is 1.62 times more volatile than SLR Investment Corp. It trades about 0.07 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.23 per unit of volatility. If you would invest 1,491 in SLR Investment Corp on September 14, 2024 and sell it today you would earn a total of 103.00 from holding SLR Investment Corp or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. SLR Investment Corp
Performance |
| Timeline |
| Park Hotels Resorts |
| SLR Investment Corp |
Park Hotels and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and SLR Investment
The main advantage of trading using opposite Park Hotels and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Park Hotels vs. BOS BETTER ONLINE | Park Hotels vs. ScanSource | Park Hotels vs. JAPAN TOBACCO UNSPADR12 | Park Hotels vs. YATRA ONLINE DL 0001 |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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