Correlation Between Park Hotels and Pekin Life
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Pekin Life 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 Pekin Life 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 Pekin Life Insurance, you can compare the effects of market volatilities on Park Hotels and Pekin Life 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 Pekin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Pekin Life.
Diversification Opportunities for Park Hotels and Pekin Life
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Park and Pekin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Park Hotels i.e., Park Hotels and Pekin Life go up and down completely randomly.
Pair Corralation between Park Hotels and Pekin Life
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 4.21 times more return on investment than Pekin Life. However, Park Hotels is 4.21 times more volatile than Pekin Life Insurance. It trades about 0.21 of its potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.23 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Hotels Resorts vs. Pekin Life Insurance
Performance |
| Timeline |
| Park Hotels Resorts |
| Pekin Life Insurance |
Park Hotels and Pekin Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Pekin Life
The main advantage of trading using opposite Park Hotels and Pekin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Pekin Life 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 Pekin Life will offset losses from the drop in Pekin Life's long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Service Properties Trust |
| Pekin Life vs. Invesco High Income | Pekin Life vs. Blackrock Muniholdings Ny | Pekin Life vs. MFS Investment Grade | Pekin Life vs. Federated Premier Municipal |
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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