Correlation Between Playa Hotels and Blue Owl
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Blue Owl 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 Blue Owl 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 Blue Owl Capital, you can compare the effects of market volatilities on Playa Hotels and Blue Owl 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 Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Blue Owl.
Diversification Opportunities for Playa Hotels and Blue Owl
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Playa and Blue is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital 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 Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of Playa Hotels i.e., Playa Hotels and Blue Owl go up and down completely randomly.
Pair Corralation between Playa Hotels and Blue Owl
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.77 times more return on investment than Blue Owl. However, Playa Hotels is 1.77 times more volatile than Blue Owl Capital. It trades about 0.06 of its potential returns per unit of risk. Blue Owl Capital is currently generating about 0.11 per unit of risk. If you would invest 610.00 in Playa Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 392.00 from holding Playa Hotels Resorts or generate 64.26% 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. Blue Owl Capital
Performance |
| Timeline |
| Playa Hotels Resorts |
| Blue Owl Capital |
Playa Hotels and Blue Owl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Blue Owl
The main advantage of trading using opposite Playa Hotels and Blue Owl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Blue Owl 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 Blue Owl will offset losses from the drop in Blue Owl'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 |
| Blue Owl vs. Playa Hotels Resorts | Blue Owl vs. Oatly Group AB | Blue Owl vs. Treasury Wine Estates | Blue Owl vs. Willamette Valley Vineyards |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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