Correlation Between Playa Hotels and Good Times
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Good Times 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 Good Times 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 Good Times Restaurants, you can compare the effects of market volatilities on Playa Hotels and Good Times 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 Good Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Good Times.
Diversification Opportunities for Playa Hotels and Good Times
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playa and Good is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Good Times Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Times Restaurants 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 Good Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Times Restaurants has no effect on the direction of Playa Hotels i.e., Playa Hotels and Good Times go up and down completely randomly.
Pair Corralation between Playa Hotels and Good Times
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.12 times more return on investment than Good Times. However, Playa Hotels is 1.12 times more volatile than Good Times Restaurants. It trades about 0.29 of its potential returns per unit of risk. Good Times Restaurants is currently generating about -0.18 per unit of risk. If you would invest 848.00 in Playa Hotels Resorts on August 24, 2024 and sell it today you would earn a total of 121.00 from holding Playa Hotels Resorts or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Good Times Restaurants
Performance |
| Timeline |
| Playa Hotels Resorts |
| Good Times Restaurants |
Playa Hotels and Good Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Good Times
The main advantage of trading using opposite Playa Hotels and Good Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Good Times 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 Good Times will offset losses from the drop in Good Times' long position.| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
| Good Times vs. Nathans Famous | Good Times vs. FAT Brands | Good Times vs. El Pollo Loco | Good Times vs. Ark Restaurants Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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