Correlation Between Playa Hotels and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and INTERCONT HOTELS 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 INTERCONT HOTELS 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 INTERCONT HOTELS, you can compare the effects of market volatilities on Playa Hotels and INTERCONT HOTELS 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 INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and INTERCONT HOTELS.
Diversification Opportunities for Playa Hotels and INTERCONT HOTELS
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Playa and INTERCONT is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS 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 INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of Playa Hotels i.e., Playa Hotels and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between Playa Hotels and INTERCONT HOTELS
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 1.14 times more return on investment than INTERCONT HOTELS. However, Playa Hotels is 1.14 times more volatile than INTERCONT HOTELS. It trades about 0.22 of its potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.23 per unit of risk. If you would invest 805.00 in Playa Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 120.00 from holding Playa Hotels Resorts or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. INTERCONT HOTELS
Performance |
| Timeline |
| Playa Hotels Resorts |
| INTERCONT HOTELS |
Playa Hotels and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and INTERCONT HOTELS
The main advantage of trading using opposite Playa Hotels and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| Playa Hotels vs. Superior Plus Corp | Playa Hotels vs. NMI Holdings | Playa Hotels vs. Origin Agritech | Playa Hotels vs. SIVERS SEMICONDUCTORS AB |
| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Positions Ratings module to 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.
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