Correlation Between Playa Hotels and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Nextplat Corp 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 Nextplat Corp 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 Nextplat Corp, you can compare the effects of market volatilities on Playa Hotels and Nextplat Corp 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 Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Nextplat Corp.
Diversification Opportunities for Playa Hotels and Nextplat Corp
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Playa and Nextplat is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat Corp 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Playa Hotels i.e., Playa Hotels and Nextplat Corp go up and down completely randomly.
Pair Corralation between Playa Hotels and Nextplat Corp
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 0.35 times more return on investment than Nextplat Corp. However, Playa Hotels Resorts is 2.86 times less risky than Nextplat Corp. It trades about 0.22 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.11 per unit of risk. If you would invest 769.00 in Playa Hotels Resorts on September 2, 2024 and sell it today you would earn a total of 210.00 from holding Playa Hotels Resorts or generate 27.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Nextplat Corp
Performance |
| Timeline |
| Playa Hotels Resorts |
| Nextplat Corp |
Playa Hotels and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Nextplat Corp
The main advantage of trading using opposite Playa Hotels and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Nextplat Corp 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 Nextplat Corp will offset losses from the drop in Nextplat Corp's long position.| Playa Hotels vs. Mondee Holdings | Playa Hotels vs. MakeMyTrip Limited | Playa Hotels vs. Tuniu Corp | Playa Hotels vs. TripAdvisor |
| Nextplat Corp vs. Ke Holdings | Nextplat Corp vs. nCino Inc | Nextplat Corp vs. Kingsoft Cloud Holdings | Nextplat Corp vs. Jfrog |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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