Correlation Between Playa Hotels and CVB Financial
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and CVB Financial 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 CVB Financial 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 CVB Financial Corp, you can compare the effects of market volatilities on Playa Hotels and CVB Financial 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 CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and CVB Financial.
Diversification Opportunities for Playa Hotels and CVB Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playa and CVB is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial 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 CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of Playa Hotels i.e., Playa Hotels and CVB Financial go up and down completely randomly.
Pair Corralation between Playa Hotels and CVB Financial
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 0.88 times more return on investment than CVB Financial. However, Playa Hotels Resorts is 1.13 times less risky than CVB Financial. It trades about 0.06 of its potential returns per unit of risk. CVB Financial Corp is currently generating about 0.01 per unit of risk. If you would invest 655.00 in Playa Hotels Resorts on October 16, 2024 and sell it today you would earn a total of 535.00 from holding Playa Hotels Resorts or generate 81.68% 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. CVB Financial Corp
Performance |
| Timeline |
| Playa Hotels Resorts |
| CVB Financial Corp |
Playa Hotels and CVB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and CVB Financial
The main advantage of trading using opposite Playa Hotels and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, CVB Financial 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 CVB Financial will offset losses from the drop in CVB Financial's long position.| Playa Hotels vs. ecotel communication ag | Playa Hotels vs. Highlight Communications AG | Playa Hotels vs. Cairo Communication SpA | Playa Hotels vs. Ribbon Communications |
| CVB Financial vs. Haier Smart Home | CVB Financial vs. ADDUS HOMECARE | CVB Financial vs. Hisense Home Appliances | CVB Financial vs. CITIC Telecom International |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |