Correlation Between Pekin Life and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Pekin Life and Park Hotels 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 Pekin Life and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pekin Life Insurance and Park Hotels Resorts, you can compare the effects of market volatilities on Pekin Life and Park Hotels 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 Pekin Life with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Park Hotels.
Diversification Opportunities for Pekin Life and Park Hotels
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pekin and Park is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts and Pekin Life 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 Pekin Life Insurance are associated (or correlated) with Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Pekin Life i.e., Pekin Life and Park Hotels go up and down completely randomly.
Pair Corralation between Pekin Life and Park Hotels
Given the investment horizon of 90 days Pekin Life is expected to generate 7.73 times less return on investment than Park Hotels. But when comparing it to its historical volatility, Pekin Life Insurance is 1.2 times less risky than Park Hotels. It trades about 0.01 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 997.00 in Park Hotels Resorts on August 30, 2024 and sell it today you would earn a total of 559.00 from holding Park Hotels Resorts or generate 56.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pekin Life Insurance vs. Park Hotels Resorts
Performance |
| Timeline |
| Pekin Life Insurance |
| Park Hotels Resorts |
Pekin Life and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pekin Life and Park Hotels
The main advantage of trading using opposite Pekin Life and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pekin Life position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Pekin Life vs. Invesco High Income | Pekin Life vs. Blackrock Muniholdings Ny | Pekin Life vs. Nuveen California Select | Pekin Life vs. MFS Investment Grade |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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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