Correlation Between Playa Hotels and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on Playa Hotels and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and DATANG INTL.
Diversification Opportunities for Playa Hotels and DATANG INTL
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playa and DATANG is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of Playa Hotels i.e., Playa Hotels and DATANG INTL go up and down completely randomly.
Pair Corralation between Playa Hotels and DATANG INTL
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 2.02 times more return on investment than DATANG INTL. However, Playa Hotels is 2.02 times more volatile than DATANG INTL POW. It trades about 0.25 of its potential returns per unit of risk. DATANG INTL POW is currently generating about -0.18 per unit of risk. If you would invest 920.00 in Playa Hotels Resorts on October 21, 2024 and sell it today you would earn a total of 280.00 from holding Playa Hotels Resorts or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. DATANG INTL POW
Performance |
| Timeline |
| Playa Hotels Resorts |
| DATANG INTL POW |
Playa Hotels and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and DATANG INTL
The main advantage of trading using opposite Playa Hotels and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.| Playa Hotels vs. Marie Brizard Wine | Playa Hotels vs. VIRGIN WINES UK | Playa Hotels vs. Treasury Wine Estates | Playa Hotels vs. EAGLE MATERIALS |
| DATANG INTL vs. LG Display Co | DATANG INTL vs. GREENX METALS LTD | DATANG INTL vs. TRAVEL LEISURE DL 01 | DATANG INTL vs. Calibre Mining Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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