Correlation Between Playa Hotels and Affiliated Resources
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Affiliated Resources 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 Affiliated Resources 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 Affiliated Resources Corp, you can compare the effects of market volatilities on Playa Hotels and Affiliated Resources 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 Affiliated Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Affiliated Resources.
Diversification Opportunities for Playa Hotels and Affiliated Resources
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playa and Affiliated is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Affiliated Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Resources Corp 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 Affiliated Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Resources Corp has no effect on the direction of Playa Hotels i.e., Playa Hotels and Affiliated Resources go up and down completely randomly.
Pair Corralation between Playa Hotels and Affiliated Resources
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 0.55 times more return on investment than Affiliated Resources. However, Playa Hotels Resorts is 1.82 times less risky than Affiliated Resources. It trades about 0.32 of its potential returns per unit of risk. Affiliated Resources Corp is currently generating about -0.16 per unit of risk. If you would invest 855.00 in Playa Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 124.00 from holding Playa Hotels Resorts or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Affiliated Resources Corp
Performance |
| Timeline |
| Playa Hotels Resorts |
| Affiliated Resources Corp |
Playa Hotels and Affiliated Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Affiliated Resources
The main advantage of trading using opposite Playa Hotels and Affiliated Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Affiliated Resources 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 Affiliated Resources will offset losses from the drop in Affiliated Resources' long position.| Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited | Playa Hotels vs. Tuniu Corp | Playa Hotels vs. TripAdvisor |
| Affiliated Resources vs. LithiumBank Resources Corp | Affiliated Resources vs. Arrow Financial | Affiliated Resources vs. Mill City Ventures | Affiliated Resources vs. Empresa Distribuidora y |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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