Correlation Between Playa Hotels and Century Casinos
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Century Casinos 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 Century Casinos 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 Century Casinos, you can compare the effects of market volatilities on Playa Hotels and Century Casinos 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 Century Casinos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Century Casinos.
Diversification Opportunities for Playa Hotels and Century Casinos
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Playa and Century is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Century Casinos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Casinos 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 Century Casinos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Casinos has no effect on the direction of Playa Hotels i.e., Playa Hotels and Century Casinos go up and down completely randomly.
Pair Corralation between Playa Hotels and Century Casinos
Given the investment horizon of 90 days Playa Hotels is expected to generate 2.97 times less return on investment than Century Casinos. But when comparing it to its historical volatility, Playa Hotels Resorts is 2.02 times less risky than Century Casinos. It trades about 0.22 of its potential returns per unit of risk. Century Casinos is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Century Casinos on August 30, 2024 and sell it today you would earn a total of 117.00 from holding Century Casinos or generate 35.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Century Casinos
Performance |
| Timeline |
| Playa Hotels Resorts |
| Century Casinos |
Playa Hotels and Century Casinos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Century Casinos
The main advantage of trading using opposite Playa Hotels and Century Casinos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Century Casinos 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 Century Casinos will offset losses from the drop in Century Casinos' long position.| Playa Hotels vs. Yatra Online | Playa Hotels vs. Despegar Corp | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited |
| Century Casinos vs. Golden Entertainment | Century Casinos vs. Monarch Casino Resort | Century Casinos vs. Red Rock Resorts | Century Casinos vs. Studio City International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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