Correlation Between Playa Hotels and Gan
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Gan 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 Gan 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 Gan, you can compare the effects of market volatilities on Playa Hotels and Gan 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 Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Gan.
Diversification Opportunities for Playa Hotels and Gan
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playa and Gan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan 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 Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of Playa Hotels i.e., Playa Hotels and Gan go up and down completely randomly.
Pair Corralation between Playa Hotels and Gan
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 2.28 times more return on investment than Gan. However, Playa Hotels is 2.28 times more volatile than Gan. It trades about 0.29 of its potential returns per unit of risk. Gan is currently generating about 0.03 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Gan
Performance |
| Timeline |
| Playa Hotels Resorts |
| Gan |
Playa Hotels and Gan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Gan
The main advantage of trading using opposite Playa Hotels and Gan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Gan 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 Gan will offset losses from the drop in Gan's long position.| Playa Hotels vs. Yatra Online | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. TripAdvisor | Playa Hotels vs. Thayer Ventures Acquisition |
| Gan vs. Rush Street Interactive | Gan vs. Inspired Entertainment | Gan vs. PointsBet Holdings Limited | Gan vs. PlayAGS |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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