Correlation Between Galaxy Entertainment and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Galaxy Entertainment 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 Galaxy Entertainment and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galaxy Entertainment Group and Playa Hotels Resorts, you can compare the effects of market volatilities on Galaxy Entertainment 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 Galaxy Entertainment with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galaxy Entertainment and Playa Hotels.
Diversification Opportunities for Galaxy Entertainment and Playa Hotels
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Galaxy and Playa is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Entertainment 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 Galaxy Entertainment 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 Galaxy Entertainment 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 Galaxy Entertainment i.e., Galaxy Entertainment and Playa Hotels go up and down completely randomly.
Pair Corralation between Galaxy Entertainment and Playa Hotels
Assuming the 90 days trading horizon Galaxy Entertainment is expected to generate 5.28 times less return on investment than Playa Hotels. In addition to that, Galaxy Entertainment is 1.6 times more volatile than Playa Hotels Resorts. It trades about 0.01 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.06 per unit of volatility. If you would invest 675.00 in Playa Hotels Resorts on September 26, 2024 and sell it today you would earn a total of 230.00 from holding Playa Hotels Resorts or generate 34.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galaxy Entertainment Group vs. Playa Hotels Resorts
Performance |
| Timeline |
| Galaxy Entertainment |
| Playa Hotels Resorts |
Galaxy Entertainment and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galaxy Entertainment and Playa Hotels
The main advantage of trading using opposite Galaxy Entertainment and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Entertainment 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.| Galaxy Entertainment vs. THORNEY TECHS LTD | Galaxy Entertainment vs. SBI Insurance Group | Galaxy Entertainment vs. Selective Insurance Group | Galaxy Entertainment vs. Direct Line Insurance |
| Playa Hotels vs. Las Vegas Sands | Playa Hotels vs. Galaxy Entertainment Group | Playa Hotels vs. Sands China | Playa Hotels vs. MGM Resorts 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |