Correlation Between Kennedy Wilson and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and Park 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 Kennedy Wilson and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kennedy Wilson Holdings and Park Hotels Resorts, you can compare the effects of market volatilities on Kennedy Wilson and Park 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 Kennedy Wilson with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and Park Hotels.
Diversification Opportunities for Kennedy Wilson and Park Hotels
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kennedy and Park is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts and Kennedy Wilson 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 Kennedy Wilson Holdings are associated (or correlated) with Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Park Hotels go up and down completely randomly.
Pair Corralation between Kennedy Wilson and Park Hotels
Allowing for the 90-day total investment horizon Kennedy Wilson is expected to generate 2.72 times less return on investment than Park Hotels. In addition to that, Kennedy Wilson is 1.22 times more volatile than Park Hotels Resorts. It trades about 0.07 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.23 per unit of volatility. If you would invest 1,396 in Park Hotels Resorts on August 29, 2024 and sell it today you would earn a total of 140.00 from holding Park Hotels Resorts or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kennedy Wilson Holdings vs. Park Hotels Resorts
Performance |
| Timeline |
| Kennedy Wilson Holdings |
| Park Hotels Resorts |
Kennedy Wilson and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kennedy Wilson and Park Hotels
The main advantage of trading using opposite Kennedy Wilson and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kennedy Wilson position performs unexpectedly, Park 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 Park Hotels will offset losses from the drop in Park Hotels' long position.The idea behind Kennedy Wilson Holdings and Park Hotels Resorts pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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