Correlation Between Playa Hotels and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on Playa Hotels and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Capital Clean.
Diversification Opportunities for Playa Hotels and Capital Clean
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playa and Capital is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Playa Hotels i.e., Playa Hotels and Capital Clean go up and down completely randomly.
Pair Corralation between Playa Hotels and Capital Clean
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.53 times more return on investment than Capital Clean. However, Playa Hotels is 1.53 times more volatile than Capital Clean Energy. It trades about 0.29 of its potential returns per unit of risk. Capital Clean Energy is currently generating about 0.04 per unit of risk. If you would invest 872.00 in Playa Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 118.00 from holding Playa Hotels Resorts or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Capital Clean Energy
Performance |
| Timeline |
| Playa Hotels Resorts |
| Capital Clean Energy |
Playa Hotels and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Capital Clean
The main advantage of trading using opposite Playa Hotels and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Playa Hotels vs. Yatra Online | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. TripAdvisor | Playa Hotels vs. Thayer Ventures Acquisition |
| Capital Clean vs. Star Bulk Carriers | Capital Clean vs. TOP Ships | Capital Clean vs. Seanergy Maritime Holdings | Capital Clean vs. Performance Shipping |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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