Correlation Between Kinsale Capital and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital and Playa Hotels 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 Kinsale Capital and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and Playa Hotels Resorts, you can compare the effects of market volatilities on Kinsale Capital and Playa Hotels 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 Kinsale Capital with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Playa Hotels.
Diversification Opportunities for Kinsale Capital and Playa Hotels
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinsale and Playa is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts and Kinsale Capital 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 Kinsale Capital Group are associated (or correlated) with Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Playa Hotels go up and down completely randomly.
Pair Corralation between Kinsale Capital and Playa Hotels
Given the investment horizon of 90 days Kinsale Capital is expected to generate 3.64 times less return on investment than Playa Hotels. In addition to that, Kinsale Capital is 1.1 times more volatile than Playa Hotels Resorts. It trades about 0.05 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.21 per unit of volatility. If you would invest 781.00 in Playa Hotels Resorts on August 29, 2024 and sell it today you would earn a total of 196.00 from holding Playa Hotels Resorts or generate 25.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsale Capital Group vs. Playa Hotels Resorts
Performance |
| Timeline |
| Kinsale Capital Group |
| Playa Hotels Resorts |
Kinsale Capital and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Playa Hotels
The main advantage of trading using opposite Kinsale Capital and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Kinsale Capital vs. Argo Group International | Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. NI Holdings | Kinsale Capital vs. Donegal Group A |
| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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