Correlation Between Playa Hotels and Aerofoam Metals
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals, you can compare the effects of market volatilities on Playa Hotels and Aerofoam Metals 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 Aerofoam Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Aerofoam Metals.
Diversification Opportunities for Playa Hotels and Aerofoam Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playa and Aerofoam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Aerofoam Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerofoam Metals 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 Aerofoam Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerofoam Metals has no effect on the direction of Playa Hotels i.e., Playa Hotels and Aerofoam Metals go up and down completely randomly.
Pair Corralation between Playa Hotels and Aerofoam Metals
If you would invest 872.00 in Playa Hotels Resorts on August 29, 2024 and sell it today you would earn a total of 98.50 from holding Playa Hotels Resorts or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Aerofoam Metals
Performance |
| Timeline |
| Playa Hotels Resorts |
| Aerofoam Metals |
Playa Hotels and Aerofoam Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Aerofoam Metals
The main advantage of trading using opposite Playa Hotels and Aerofoam Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Aerofoam Metals 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 Aerofoam Metals will offset losses from the drop in Aerofoam Metals' long position.| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
| Aerofoam Metals vs. Stepstone Group | Aerofoam Metals vs. Artisan Partners Asset | Aerofoam Metals vs. Perseus Mining Limited | Aerofoam Metals vs. Lion One Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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