Correlation Between Playa Hotels and Martifer SGPS
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Martifer SGPS 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 Martifer SGPS 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 Martifer SGPS SA, you can compare the effects of market volatilities on Playa Hotels and Martifer SGPS 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 Martifer SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Martifer SGPS.
Diversification Opportunities for Playa Hotels and Martifer SGPS
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playa and Martifer is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Martifer SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martifer SGPS SA 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 Martifer SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martifer SGPS SA has no effect on the direction of Playa Hotels i.e., Playa Hotels and Martifer SGPS go up and down completely randomly.
Pair Corralation between Playa Hotels and Martifer SGPS
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 5.22 times more return on investment than Martifer SGPS. However, Playa Hotels is 5.22 times more volatile than Martifer SGPS SA. It trades about 0.24 of its potential returns per unit of risk. Martifer SGPS SA is currently generating about -0.02 per unit of risk. If you would invest 935.00 in Playa Hotels Resorts on October 8, 2024 and sell it today you would earn a total of 265.00 from holding Playa Hotels Resorts or generate 28.34% 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. Martifer SGPS SA
Performance |
| Timeline |
| Playa Hotels Resorts |
| Martifer SGPS SA |
Playa Hotels and Martifer SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Martifer SGPS
The main advantage of trading using opposite Playa Hotels and Martifer SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Martifer SGPS 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 Martifer SGPS will offset losses from the drop in Martifer SGPS's long position.| Playa Hotels vs. Entain Plc | Playa Hotels vs. Boyd Gaming | Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings |
| Martifer SGPS vs. MELIA HOTELS | Martifer SGPS vs. Geely Automobile Holdings | Martifer SGPS vs. INTER CARS SA | Martifer SGPS vs. EIDESVIK OFFSHORE NK |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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