Correlation Between Playa Hotels and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on Playa Hotels and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Superior Plus.
Diversification Opportunities for Playa Hotels and Superior Plus
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playa and Superior is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Playa Hotels i.e., Playa Hotels and Superior Plus go up and down completely randomly.
Pair Corralation between Playa Hotels and Superior Plus
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 0.63 times more return on investment than Superior Plus. However, Playa Hotels Resorts is 1.58 times less risky than Superior Plus. It trades about 0.19 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.04 per unit of risk. If you would invest 790.00 in Playa Hotels Resorts on August 25, 2024 and sell it today you would earn a total of 105.00 from holding Playa Hotels Resorts or generate 13.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Superior Plus Corp
Performance |
| Timeline |
| Playa Hotels Resorts |
| Superior Plus Corp |
Playa Hotels and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Superior Plus
The main advantage of trading using opposite Playa Hotels and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels vs. SIVERS SEMICONDUCTORS AB |
| Superior Plus vs. SBI Insurance Group | Superior Plus vs. Ping An Insurance | Superior Plus vs. Safety Insurance Group | Superior Plus vs. MSAD INSURANCE |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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