Correlation Between Park Hotels and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Dine Brands 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 Dine Brands 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 Dine Brands Global, you can compare the effects of market volatilities on Park Hotels and Dine Brands 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Dine Brands.
Diversification Opportunities for Park Hotels and Dine Brands
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Park and Dine is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Park Hotels i.e., Park Hotels and Dine Brands go up and down completely randomly.
Pair Corralation between Park Hotels and Dine Brands
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 0.8 times more return on investment than Dine Brands. However, Park Hotels Resorts is 1.25 times less risky than Dine Brands. It trades about 0.03 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.06 per unit of risk. If you would invest 1,169 in Park Hotels Resorts on October 25, 2024 and sell it today you would earn a total of 204.00 from holding Park Hotels Resorts or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Dine Brands Global
Performance |
| Timeline |
| Park Hotels Resorts |
| Dine Brands Global |
Park Hotels and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Dine Brands
The main advantage of trading using opposite Park Hotels and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
| Dine Brands vs. Bank of America | Dine Brands vs. RLJ Lodging Trust | Dine Brands vs. PennyMac Finl Svcs | Dine Brands vs. Newhydrogen |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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