Correlation Between Playa Hotels and Apple
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Playa Hotels and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Apple.
Diversification Opportunities for Playa Hotels and Apple
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playa and Apple is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Playa Hotels i.e., Playa Hotels and Apple go up and down completely randomly.
Pair Corralation between Playa Hotels and Apple
Assuming the 90 days horizon Playa Hotels is expected to generate 3.01 times less return on investment than Apple. In addition to that, Playa Hotels is 1.5 times more volatile than Apple Inc. It trades about 0.14 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.61 per unit of volatility. If you would invest 21,135 in Apple Inc on September 13, 2024 and sell it today you would earn a total of 2,640 from holding Apple Inc or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Apple Inc
Performance |
| Timeline |
| Playa Hotels Resorts |
| Apple Inc |
Playa Hotels and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Apple
The main advantage of trading using opposite Playa Hotels and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Playa Hotels vs. Harmony Gold Mining | Playa Hotels vs. Vastned Retail NV | Playa Hotels vs. Lion One Metals | Playa Hotels vs. Fast Retailing Co |
| Apple vs. Perma Fix Environmental Services | Apple vs. MITSUBISHI STEEL MFG | Apple vs. ALGOMA STEEL GROUP | Apple vs. Aegean Airlines SA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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