Correlation Between Playa Hotels and Caseys General
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Caseys General 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 Caseys General 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 Caseys General Stores, you can compare the effects of market volatilities on Playa Hotels and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Caseys General.
Diversification Opportunities for Playa Hotels and Caseys General
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playa and Caseys is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Playa Hotels i.e., Playa Hotels and Caseys General go up and down completely randomly.
Pair Corralation between Playa Hotels and Caseys General
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 7.87 times more return on investment than Caseys General. However, Playa Hotels is 7.87 times more volatile than Caseys General Stores. It trades about 0.25 of its potential returns per unit of risk. Caseys General Stores is currently generating about -0.23 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Caseys General Stores
Performance |
| Timeline |
| Playa Hotels Resorts |
| Caseys General Stores |
Playa Hotels and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Caseys General
The main advantage of trading using opposite Playa Hotels and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General'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 |
| Caseys General vs. CVS Health | Caseys General vs. Take Two Interactive Software | Caseys General vs. MAGIC SOFTWARE ENTR | Caseys General vs. CARDINAL HEALTH |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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