Correlation Between Park Hotels and First Industrial
Can any of the company-specific risk be diversified away by investing in both Park Hotels and First Industrial 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 First Industrial 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 First Industrial Realty, you can compare the effects of market volatilities on Park Hotels and First Industrial 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 First Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and First Industrial.
Diversification Opportunities for Park Hotels and First Industrial
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Park and First is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and First Industrial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Industrial Realty 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 First Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Industrial Realty has no effect on the direction of Park Hotels i.e., Park Hotels and First Industrial go up and down completely randomly.
Pair Corralation between Park Hotels and First Industrial
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 1.72 times more return on investment than First Industrial. However, Park Hotels is 1.72 times more volatile than First Industrial Realty. It trades about 0.23 of its potential returns per unit of risk. First Industrial Realty is currently generating about 0.03 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. First Industrial Realty
Performance |
| Timeline |
| Park Hotels Resorts |
| First Industrial Realty |
Park Hotels and First Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and First Industrial
The main advantage of trading using opposite Park Hotels and First Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, First Industrial 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 First Industrial will offset losses from the drop in First Industrial'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 |
| First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |