Correlation Between Park Hotels and Phillips Edison
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Phillips Edison 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 Phillips Edison 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 Phillips Edison Co, you can compare the effects of market volatilities on Park Hotels and Phillips Edison 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 Phillips Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Phillips Edison.
Diversification Opportunities for Park Hotels and Phillips Edison
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and Phillips is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Phillips Edison Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips Edison 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 Phillips Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips Edison has no effect on the direction of Park Hotels i.e., Park Hotels and Phillips Edison go up and down completely randomly.
Pair Corralation between Park Hotels and Phillips Edison
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 1.56 times more return on investment than Phillips Edison. However, Park Hotels is 1.56 times more volatile than Phillips Edison Co. It trades about 0.03 of its potential returns per unit of risk. Phillips Edison Co is currently generating about 0.03 per unit of risk. If you would invest 1,130 in Park Hotels Resorts on November 2, 2024 and sell it today you would earn a total of 235.00 from holding Park Hotels Resorts or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Phillips Edison Co
Performance |
| Timeline |
| Park Hotels Resorts |
| Phillips Edison |
Park Hotels and Phillips Edison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Phillips Edison
The main advantage of trading using opposite Park Hotels and Phillips Edison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Phillips Edison 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 Phillips Edison will offset losses from the drop in Phillips Edison'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 |
| Phillips Edison vs. Site Centers Corp | Phillips Edison vs. Retail Opportunity Investments | Phillips Edison vs. Urban Edge Properties | Phillips Edison vs. Rithm Property Trust |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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