Correlation Between Park Hotels and Life Time
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Life Time 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 Life Time 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 Life Time Group, you can compare the effects of market volatilities on Park Hotels and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Life Time.
Diversification Opportunities for Park Hotels and Life Time
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Park and Life is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Park Hotels i.e., Park Hotels and Life Time go up and down completely randomly.
Pair Corralation between Park Hotels and Life Time
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 0.71 times more return on investment than Life Time. However, Park Hotels Resorts is 1.4 times less risky than Life Time. It trades about 0.05 of its potential returns per unit of risk. Life Time Group is currently generating about 0.03 per unit of risk. If you would invest 1,151 in Park Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 404.00 from holding Park Hotels Resorts or generate 35.1% 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. Life Time Group
Performance |
| Timeline |
| Park Hotels Resorts |
| Life Time Group |
Park Hotels and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Life Time
The main advantage of trading using opposite Park Hotels and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time's long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. RLJ Lodging Trust |
| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Mattel Inc | Life Time vs. OneSpaWorld Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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