Correlation Between Park Hotels and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Skechers USA 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 Skechers USA 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 Skechers USA, you can compare the effects of market volatilities on Park Hotels and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Skechers USA.
Diversification Opportunities for Park Hotels and Skechers USA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Park and Skechers is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Park Hotels i.e., Park Hotels and Skechers USA go up and down completely randomly.
Pair Corralation between Park Hotels and Skechers USA
Allowing for the 90-day total investment horizon Park Hotels is expected to generate 2.17 times less return on investment than Skechers USA. In addition to that, Park Hotels is 1.04 times more volatile than Skechers USA. It trades about 0.03 of its total potential returns per unit of risk. Skechers USA is currently generating about 0.07 per unit of volatility. If you would invest 4,475 in Skechers USA on November 2, 2024 and sell it today you would earn a total of 3,136 from holding Skechers USA or generate 70.08% 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. Skechers USA
Performance |
| Timeline |
| Park Hotels Resorts |
| Skechers USA |
Park Hotels and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Skechers USA
The main advantage of trading using opposite Park Hotels and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA'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 |
| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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