Correlation Between Playa Hotels and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Bridgetown Holdings 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 Bridgetown Holdings 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 Bridgetown Holdings, you can compare the effects of market volatilities on Playa Hotels and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Bridgetown Holdings.
Diversification Opportunities for Playa Hotels and Bridgetown Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playa and Bridgetown is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Playa Hotels i.e., Playa Hotels and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Playa Hotels and Bridgetown Holdings
If you would invest 1,002 in Playa Hotels Resorts on October 11, 2024 and sell it today you would earn a total of 245.00 from holding Playa Hotels Resorts or generate 24.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Bridgetown Holdings
Performance |
| Timeline |
| Playa Hotels Resorts |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Playa Hotels and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Bridgetown Holdings
The main advantage of trading using opposite Playa Hotels and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
| Bridgetown Holdings vs. Astral Foods Limited | Bridgetown Holdings vs. SL Green Realty | Bridgetown Holdings vs. Rocky Mountain Chocolate | Bridgetown Holdings vs. Kellanova |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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