Correlation Between Playa Hotels and SNDL
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and SNDL 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 SNDL 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 SNDL Inc, you can compare the effects of market volatilities on Playa Hotels and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and SNDL.
Diversification Opportunities for Playa Hotels and SNDL
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playa and SNDL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Playa Hotels i.e., Playa Hotels and SNDL go up and down completely randomly.
Pair Corralation between Playa Hotels and SNDL
Given the investment horizon of 90 days Playa Hotels Resorts is expected to generate 1.06 times more return on investment than SNDL. However, Playa Hotels is 1.06 times more volatile than SNDL Inc. It trades about 0.04 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.28 per unit of risk. If you would invest 991.00 in Playa Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Playa Hotels Resorts or generate 1.11% 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. SNDL Inc
Performance |
| Timeline |
| Playa Hotels Resorts |
| SNDL Inc |
Playa Hotels and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playa Hotels and SNDL
The main advantage of trading using opposite Playa Hotels and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL'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 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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