Correlation Between Playa Hotels and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and Park Hotels 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 Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on Playa Hotels and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Park Hotels.
Diversification Opportunities for Playa Hotels and Park Hotels
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playa and Park is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Playa Hotels i.e., Playa Hotels and Park Hotels go up and down completely randomly.
Pair Corralation between Playa Hotels and Park Hotels
Given the investment horizon of 90 days Playa Hotels is expected to generate 1.06 times less return on investment than Park Hotels. In addition to that, Playa Hotels is 1.16 times more volatile than Park Hotels Resorts. It trades about 0.2 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.25 per unit of volatility. If you would invest 1,406 in Park Hotels Resorts on August 31, 2024 and sell it today you would earn a total of 150.00 from holding Park Hotels Resorts or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playa Hotels Resorts vs. Park Hotels Resorts
Performance |
| Timeline |
| Playa Hotels Resorts |
| Park Hotels Resorts |
Playa Hotels and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and Park Hotels
The main advantage of trading using opposite Playa Hotels and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Playa Hotels vs. Vail Resorts | Playa Hotels vs. Monarch Casino Resort | Playa Hotels vs. Hilton Grand Vacations | Playa Hotels vs. Full House Resorts |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |