Correlation Between Playa Hotels and International Game
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and International Game 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 International Game 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 International Game Technology, you can compare the effects of market volatilities on Playa Hotels and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and International Game.
Diversification Opportunities for Playa Hotels and International Game
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playa and International is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Playa Hotels i.e., Playa Hotels and International Game go up and down completely randomly.
Pair Corralation between Playa Hotels and International Game
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.17 times more return on investment than International Game. However, Playa Hotels is 1.17 times more volatile than International Game Technology. It trades about 0.29 of its potential returns per unit of risk. International Game Technology is currently generating about -0.14 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. International Game Technology
Performance |
| Timeline |
| Playa Hotels Resorts |
| International Game |
Playa Hotels and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and International Game
The main advantage of trading using opposite Playa Hotels and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
| International Game vs. Accel Entertainment | International Game vs. Light Wonder | International Game vs. Inspired Entertainment | International Game 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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