Correlation Between Park Hotels and TKO Group
Can any of the company-specific risk be diversified away by investing in both Park Hotels and TKO Group 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 TKO Group 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 TKO Group Holdings,, you can compare the effects of market volatilities on Park Hotels and TKO Group 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 TKO Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and TKO Group.
Diversification Opportunities for Park Hotels and TKO Group
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Park and TKO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and TKO Group Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKO Group 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 TKO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKO Group Holdings, has no effect on the direction of Park Hotels i.e., Park Hotels and TKO Group go up and down completely randomly.
Pair Corralation between Park Hotels and TKO Group
Allowing for the 90-day total investment horizon Park Hotels is expected to generate 1.54 times less return on investment than TKO Group. In addition to that, Park Hotels is 1.04 times more volatile than TKO Group Holdings,. It trades about 0.27 of its total potential returns per unit of risk. TKO Group Holdings, is currently generating about 0.43 per unit of volatility. If you would invest 11,625 in TKO Group Holdings, on August 28, 2024 and sell it today you would earn a total of 2,054 from holding TKO Group Holdings, or generate 17.67% 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. TKO Group Holdings,
Performance |
| Timeline |
| Park Hotels Resorts |
| TKO Group Holdings, |
Park Hotels and TKO Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and TKO Group
The main advantage of trading using opposite Park Hotels and TKO Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, TKO Group 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 TKO Group will offset losses from the drop in TKO Group'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 |
| TKO Group vs. Cardinal Health | TKO Group vs. Meiwu Technology Co | TKO Group vs. Titan Machinery | TKO Group vs. Simon Property Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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