Correlation Between Playa Hotels and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Cheche Group 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 Cheche Group 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 Cheche Group Class, you can compare the effects of market volatilities on Playa Hotels and Cheche Group 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 Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Cheche Group.
Diversification Opportunities for Playa Hotels and Cheche Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playa and Cheche is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class 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 Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of Playa Hotels i.e., Playa Hotels and Cheche Group go up and down completely randomly.
Pair Corralation between Playa Hotels and Cheche Group
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 0.59 times more return on investment than Cheche Group. However, Playa Hotels Resorts is 1.7 times less risky than Cheche Group. It trades about 0.16 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.04 per unit of risk. If you would invest 769.00 in Playa Hotels Resorts on November 2, 2024 and sell it today you would earn a total of 479.00 from holding Playa Hotels Resorts or generate 62.29% 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. Cheche Group Class
Performance |
| Timeline |
| Playa Hotels Resorts |
| Cheche Group Class |
Playa Hotels and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Cheche Group
The main advantage of trading using opposite Playa Hotels and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Cheche Group 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 Cheche Group will offset losses from the drop in Cheche Group's long position.| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
| Cheche Group vs. Oatly Group AB | Cheche Group vs. Suntory Beverage Food | Cheche Group vs. Ambev SA ADR | Cheche Group vs. SNDL Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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