Correlation Between Playa Hotels and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on Playa Hotels and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Dalata Hotel.
Diversification Opportunities for Playa Hotels and Dalata Hotel
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playa and Dalata is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Playa Hotels i.e., Playa Hotels and Dalata Hotel go up and down completely randomly.
Pair Corralation between Playa Hotels and Dalata Hotel
Given the investment horizon of 90 days Playa Hotels is expected to generate 4.15 times less return on investment than Dalata Hotel. But when comparing it to its historical volatility, Playa Hotels Resorts is 1.43 times less risky than Dalata Hotel. It trades about 0.02 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Dalata Hotel Group on August 31, 2024 and sell it today you would earn a total of 152.00 from holding Dalata Hotel Group or generate 45.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Dalata Hotel Group
Performance |
| Timeline |
| Playa Hotels Resorts |
| Dalata Hotel Group |
Playa Hotels and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Dalata Hotel
The main advantage of trading using opposite Playa Hotels and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Playa Hotels vs. Vail Resorts | Playa Hotels vs. Monarch Casino Resort | Playa Hotels vs. Hilton Grand Vacations | Playa Hotels vs. Full House Resorts |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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