Correlation Between Playa Hotels and Apollo Medical
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Apollo Medical 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 Playa Hotels and Apollo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and Apollo Medical Holdings, you can compare the effects of market volatilities on Playa Hotels and Apollo Medical 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 Playa Hotels with a short position of Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Apollo Medical.
Diversification Opportunities for Playa Hotels and Apollo Medical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playa and Apollo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings and Playa 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 Playa Hotels Resorts are associated (or correlated) with Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of Playa Hotels i.e., Playa Hotels and Apollo Medical go up and down completely randomly.
Pair Corralation between Playa Hotels and Apollo Medical
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 1.4 times more return on investment than Apollo Medical. However, Playa Hotels is 1.4 times more volatile than Apollo Medical Holdings. It trades about 0.19 of its potential returns per unit of risk. Apollo Medical Holdings is currently generating about 0.23 per unit of risk. If you would invest 810.00 in Playa Hotels Resorts on August 31, 2024 and sell it today you would earn a total of 105.00 from holding Playa Hotels Resorts or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Apollo Medical Holdings
Performance |
| Timeline |
| Playa Hotels Resorts |
| Apollo Medical Holdings |
Playa Hotels and Apollo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Apollo Medical
The main advantage of trading using opposite Playa Hotels and Apollo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Apollo Medical 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 Apollo Medical will offset losses from the drop in Apollo Medical's long position.| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels vs. SIVERS SEMICONDUCTORS AB |
| Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc | Apollo Medical vs. Apple Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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