Correlation Between Park Hotels and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Park Hotels and KLA Tencor 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 KLA Tencor 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 KLA Tencor, you can compare the effects of market volatilities on Park Hotels and KLA Tencor 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 KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and KLA Tencor.
Diversification Opportunities for Park Hotels and KLA Tencor
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Park and KLA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor 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 KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Park Hotels i.e., Park Hotels and KLA Tencor go up and down completely randomly.
Pair Corralation between Park Hotels and KLA Tencor
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 0.9 times more return on investment than KLA Tencor. However, Park Hotels Resorts is 1.11 times less risky than KLA Tencor. It trades about 0.2 of its potential returns per unit of risk. KLA Tencor is currently generating about -0.11 per unit of risk. If you would invest 1,396 in Park Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 109.00 from holding Park Hotels Resorts or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. KLA Tencor
Performance |
| Timeline |
| Park Hotels Resorts |
| KLA Tencor |
Park Hotels and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and KLA Tencor
The main advantage of trading using opposite Park Hotels and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, KLA Tencor 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 KLA Tencor will offset losses from the drop in KLA Tencor'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 |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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