Correlation Between Park Hotels and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Dynex Capital 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 Dynex Capital 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 Dynex Capital, you can compare the effects of market volatilities on Park Hotels and Dynex Capital 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 Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Dynex Capital.
Diversification Opportunities for Park Hotels and Dynex Capital
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Park and Dynex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital 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 Dynex Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynex Capital has no effect on the direction of Park Hotels i.e., Park Hotels and Dynex Capital go up and down completely randomly.
Pair Corralation between Park Hotels and Dynex Capital
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 2.16 times more return on investment than Dynex Capital. However, Park Hotels is 2.16 times more volatile than Dynex Capital. It trades about 0.23 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.07 per unit of risk. 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 |
Park Hotels Resorts vs. Dynex Capital
Performance |
| Timeline |
| Park Hotels Resorts |
| Dynex Capital |
Park Hotels and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Dynex Capital
The main advantage of trading using opposite Park Hotels and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Dynex Capital 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 Dynex Capital will offset losses from the drop in Dynex Capital's 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 |
| Dynex Capital vs. Ellington Residential Mortgage | Dynex Capital vs. Orchid Island Capital | Dynex Capital vs. ARMOUR Residential REIT | Dynex Capital vs. Ellington Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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