Correlation Between Playa Hotels and SIEMENS ENERGY
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and SIEMENS ENERGY 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 SIEMENS ENERGY 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 SIEMENS ENERGY AG, you can compare the effects of market volatilities on Playa Hotels and SIEMENS ENERGY 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 SIEMENS ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and SIEMENS ENERGY.
Diversification Opportunities for Playa Hotels and SIEMENS ENERGY
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Playa and SIEMENS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and SIEMENS ENERGY AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS ENERGY AG 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 SIEMENS ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS ENERGY AG has no effect on the direction of Playa Hotels i.e., Playa Hotels and SIEMENS ENERGY go up and down completely randomly.
Pair Corralation between Playa Hotels and SIEMENS ENERGY
Assuming the 90 days horizon Playa Hotels is expected to generate 1.63 times less return on investment than SIEMENS ENERGY. In addition to that, Playa Hotels is 1.01 times more volatile than SIEMENS ENERGY AG. It trades about 0.25 of its total potential returns per unit of risk. SIEMENS ENERGY AG is currently generating about 0.42 per unit of volatility. If you would invest 3,780 in SIEMENS ENERGY AG on September 1, 2024 and sell it today you would earn a total of 1,220 from holding SIEMENS ENERGY AG or generate 32.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Playa Hotels Resorts vs. SIEMENS ENERGY AG
Performance |
| Timeline |
| Playa Hotels Resorts |
| SIEMENS ENERGY AG |
Playa Hotels and SIEMENS ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and SIEMENS ENERGY
The main advantage of trading using opposite Playa Hotels and SIEMENS ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, SIEMENS ENERGY 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 SIEMENS ENERGY will offset losses from the drop in SIEMENS ENERGY's long position.| Playa Hotels vs. JJ SNACK FOODS | Playa Hotels vs. Suntory Beverage Food | Playa Hotels vs. Treasury Wine Estates | Playa Hotels vs. MOLSON RS BEVERAGE |
| SIEMENS ENERGY vs. Playa Hotels Resorts | SIEMENS ENERGY vs. Martin Marietta Materials | SIEMENS ENERGY vs. Dave Busters Entertainment | SIEMENS ENERGY vs. VULCAN MATERIALS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |