Correlation Between Host Hotels and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Host Hotels and PARKEN Sport 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 Host Hotels and PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Host Hotels and PARKEN Sport 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 Host Hotels with a short position of PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and PARKEN Sport.
Diversification Opportunities for Host Hotels and PARKEN Sport
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Host and PARKEN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta and Host 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 Host Hotels Resorts are associated (or correlated) with PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Host Hotels i.e., Host Hotels and PARKEN Sport go up and down completely randomly.
Pair Corralation between Host Hotels and PARKEN Sport
Assuming the 90 days horizon Host Hotels Resorts is expected to generate 0.65 times more return on investment than PARKEN Sport. However, Host Hotels Resorts is 1.53 times less risky than PARKEN Sport. It trades about 0.16 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.07 per unit of risk. If you would invest 1,670 in Host Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 80.00 from holding Host Hotels Resorts or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Host Hotels Resorts |
| PARKEN Sport Enterta |
Host Hotels and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and PARKEN Sport
The main advantage of trading using opposite Host Hotels and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. Xenia Hotels Resorts | Host Hotels vs. Summit Hotel Properties | Host Hotels vs. ASHFORD HOSPITTRUST |
| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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