Correlation Between Park Hotels and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both Park Hotels and RCI Hospitality 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 RCI Hospitality 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 RCI Hospitality Holdings, you can compare the effects of market volatilities on Park Hotels and RCI Hospitality 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 RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and RCI Hospitality.
Diversification Opportunities for Park Hotels and RCI Hospitality
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and RCI is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings 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 RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of Park Hotels i.e., Park Hotels and RCI Hospitality go up and down completely randomly.
Pair Corralation between Park Hotels and RCI Hospitality
Allowing for the 90-day total investment horizon Park Hotels is expected to generate 1.69 times less return on investment than RCI Hospitality. But when comparing it to its historical volatility, Park Hotels Resorts is 1.43 times less risky than RCI Hospitality. It trades about 0.29 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,342 in RCI Hospitality Holdings on September 1, 2024 and sell it today you would earn a total of 904.00 from holding RCI Hospitality Holdings or generate 20.82% 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. RCI Hospitality Holdings
Performance |
| Timeline |
| Park Hotels Resorts |
| RCI Hospitality Holdings |
Park Hotels and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and RCI Hospitality
The main advantage of trading using opposite Park Hotels and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality's long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Sunstone Hotel Investors | Park Hotels vs. Service Properties Trust |
| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
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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