Correlation Between Park Hotels and Better World
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Better World 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 Better World 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 Better World Acquisition, you can compare the effects of market volatilities on Park Hotels and Better World 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 Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Better World.
Diversification Opportunities for Park Hotels and Better World
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and Better is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Better World Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Acquisition 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 Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Acquisition has no effect on the direction of Park Hotels i.e., Park Hotels and Better World go up and down completely randomly.
Pair Corralation between Park Hotels and Better World
If you would invest 1,384 in Park Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 171.00 from holding Park Hotels Resorts or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Park Hotels Resorts vs. Better World Acquisition
Performance |
| Timeline |
| Park Hotels Resorts |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Park Hotels and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Better World
The main advantage of trading using opposite Park Hotels and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Service Properties Trust | Park Hotels vs. RLJ Lodging Trust |
| Better World vs. Amgen Inc | Better World vs. Allient | Better World vs. Mind Technology | Better World vs. Flex |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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