Correlation Between Park Hotels and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Park Hotels and MACOM Technology 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 MACOM Technology 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 MACOM Technology Solutions, you can compare the effects of market volatilities on Park Hotels and MACOM Technology 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 MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and MACOM Technology.
Diversification Opportunities for Park Hotels and MACOM Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Park and MACOM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Park Hotels i.e., Park Hotels and MACOM Technology go up and down completely randomly.
Pair Corralation between Park Hotels and MACOM Technology
Allowing for the 90-day total investment horizon Park Hotels is expected to generate 1.19 times less return on investment than MACOM Technology. But when comparing it to its historical volatility, Park Hotels Resorts is 1.97 times less risky than MACOM Technology. It trades about 0.25 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 11,781 in MACOM Technology Solutions on August 31, 2024 and sell it today you would earn a total of 1,386 from holding MACOM Technology Solutions or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. MACOM Technology Solutions
Performance |
| Timeline |
| Park Hotels Resorts |
| MACOM Technology Sol |
Park Hotels and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and MACOM Technology
The main advantage of trading using opposite Park Hotels and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology'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 |
| MACOM Technology vs. Power Integrations | MACOM Technology vs. Diodes Incorporated | MACOM Technology vs. Cirrus Logic | MACOM Technology vs. Amkor Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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