Correlation Between Park Hotels and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Fidus Investment 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 Fidus Investment 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 Fidus Investment Corp, you can compare the effects of market volatilities on Park Hotels and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Fidus Investment.
Diversification Opportunities for Park Hotels and Fidus Investment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and Fidus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of Park Hotels i.e., Park Hotels and Fidus Investment go up and down completely randomly.
Pair Corralation between Park Hotels and Fidus Investment
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 2.22 times more return on investment than Fidus Investment. However, Park Hotels is 2.22 times more volatile than Fidus Investment Corp. It trades about 0.05 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.08 per unit of risk. If you would invest 1,021 in Park Hotels Resorts on September 4, 2024 and sell it today you would earn a total of 517.00 from holding Park Hotels Resorts or generate 50.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Fidus Investment Corp
Performance |
| Timeline |
| Park Hotels Resorts |
| Fidus Investment Corp |
Park Hotels and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Fidus Investment
The main advantage of trading using opposite Park Hotels and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment'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 |
| Fidus Investment vs. Golub Capital BDC | Fidus Investment vs. BlackRock TCP Capital | Fidus Investment vs. Carlyle Secured Lending | Fidus Investment vs. Sixth Street Specialty |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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