Correlation Between Playa Hotels and Bt Brands
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Bt Brands 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 Bt Brands 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 Bt Brands, you can compare the effects of market volatilities on Playa Hotels and Bt Brands 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 Bt Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Bt Brands.
Diversification Opportunities for Playa Hotels and Bt Brands
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playa and BTBD is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Bt Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bt Brands 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 Bt Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bt Brands has no effect on the direction of Playa Hotels i.e., Playa Hotels and Bt Brands go up and down completely randomly.
Pair Corralation between Playa Hotels and Bt Brands
Given the investment horizon of 90 days Playa Hotels is expected to generate 2.27 times less return on investment than Bt Brands. But when comparing it to its historical volatility, Playa Hotels Resorts is 2.94 times less risky than Bt Brands. It trades about 0.07 of its potential returns per unit of risk. Bt Brands is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Bt Brands on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Bt Brands or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Bt Brands
Performance |
| Timeline |
| Playa Hotels Resorts |
| Bt Brands |
Playa Hotels and Bt Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Bt Brands
The main advantage of trading using opposite Playa Hotels and Bt Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Bt Brands 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 Bt Brands will offset losses from the drop in Bt Brands' long position.| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
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.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |