Correlation Between Playa Hotels and Full House
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Full House 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 Full House 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 Full House Resorts, you can compare the effects of market volatilities on Playa Hotels and Full House 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 Full House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Full House.
Diversification Opportunities for Playa Hotels and Full House
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playa and Full is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Full House Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full House Resorts 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 Full House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full House Resorts has no effect on the direction of Playa Hotels i.e., Playa Hotels and Full House go up and down completely randomly.
Pair Corralation between Playa Hotels and Full House
Given the investment horizon of 90 days Playa Hotels is expected to generate 1.08 times less return on investment than Full House. But when comparing it to its historical volatility, Playa Hotels Resorts is 1.92 times less risky than Full House. It trades about 0.08 of its potential returns per unit of risk. Full House Resorts is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 376.00 in Full House Resorts on August 25, 2024 and sell it today you would earn a total of 110.00 from holding Full House Resorts or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Full House Resorts
Performance |
| Timeline |
| Playa Hotels Resorts |
| Full House Resorts |
Playa Hotels and Full House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Full House
The main advantage of trading using opposite Playa Hotels and Full House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Full House 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 Full House will offset losses from the drop in Full House's long position.| Playa Hotels vs. Yatra Online | Playa Hotels vs. Despegar Corp | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited |
| Full House vs. Monarch Casino Resort | Full House vs. Red Rock Resorts | Full House vs. Golden Entertainment | Full House vs. Playa Hotels Resorts |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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