Correlation Between Park Hotels and Hannon Armstrong
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Hannon Armstrong 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 Hannon Armstrong 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 Hannon Armstrong Sustainable, you can compare the effects of market volatilities on Park Hotels and Hannon Armstrong 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 Hannon Armstrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Hannon Armstrong.
Diversification Opportunities for Park Hotels and Hannon Armstrong
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and Hannon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Hannon Armstrong Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannon Armstrong Sus 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 Hannon Armstrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannon Armstrong Sus has no effect on the direction of Park Hotels i.e., Park Hotels and Hannon Armstrong go up and down completely randomly.
Pair Corralation between Park Hotels and Hannon Armstrong
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 0.48 times more return on investment than Hannon Armstrong. However, Park Hotels Resorts is 2.08 times less risky than Hannon Armstrong. It trades about 0.21 of its potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about -0.18 per unit of risk. If you would invest 1,389 in Park Hotels Resorts on August 26, 2024 and sell it today you would earn a total of 116.00 from holding Park Hotels Resorts or generate 8.35% 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. Hannon Armstrong Sustainable
Performance |
| Timeline |
| Park Hotels Resorts |
| Hannon Armstrong Sus |
Park Hotels and Hannon Armstrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Hannon Armstrong
The main advantage of trading using opposite Park Hotels and Hannon Armstrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Hannon Armstrong 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 Hannon Armstrong will offset losses from the drop in Hannon Armstrong's long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Service Properties Trust |
| Hannon Armstrong vs. Equinix | Hannon Armstrong vs. Crown Castle | Hannon Armstrong vs. American Tower Corp | Hannon Armstrong vs. Iron Mountain Incorporated |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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