Correlation Between Playa Hotels and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Playa Hotels and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and CENTURIA OFFICE.
Diversification Opportunities for Playa Hotels and CENTURIA OFFICE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playa and CENTURIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Playa Hotels i.e., Playa Hotels and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between Playa Hotels and CENTURIA OFFICE
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 1.19 times more return on investment than CENTURIA OFFICE. However, Playa Hotels is 1.19 times more volatile than CENTURIA OFFICE REIT. It trades about 0.06 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.01 per unit of risk. If you would invest 565.00 in Playa Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 355.00 from holding Playa Hotels Resorts or generate 62.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| Playa Hotels Resorts |
| CENTURIA OFFICE REIT |
Playa Hotels and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and CENTURIA OFFICE
The main advantage of trading using opposite Playa Hotels and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| Playa Hotels vs. United States Steel | Playa Hotels vs. RELIANCE STEEL AL | Playa Hotels vs. Insteel Industries | Playa Hotels vs. TELES Informationstechnologien AG |
| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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