Correlation Between REGAL HOTEL and Park Hotels
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL 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 REGAL HOTEL and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL HOTEL INTL and Park Hotels Resorts, you can compare the effects of market volatilities on REGAL HOTEL 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 REGAL HOTEL with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and Park Hotels.
Diversification Opportunities for REGAL HOTEL and Park Hotels
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between REGAL and Park is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL 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 REGAL HOTEL 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 REGAL HOTEL INTL 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 REGAL HOTEL i.e., REGAL HOTEL and Park Hotels go up and down completely randomly.
Pair Corralation between REGAL HOTEL and Park Hotels
Assuming the 90 days trading horizon REGAL HOTEL is expected to generate 5.66 times less return on investment than Park Hotels. In addition to that, REGAL HOTEL is 1.16 times more volatile than Park Hotels Resorts. It trades about 0.01 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.08 per unit of volatility. If you would invest 1,314 in Park Hotels Resorts on August 30, 2024 and sell it today you would earn a total of 136.00 from holding Park Hotels Resorts or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. Park Hotels Resorts
Performance |
| Timeline |
| REGAL HOTEL INTL |
| Park Hotels Resorts |
REGAL HOTEL and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and Park Hotels
The main advantage of trading using opposite REGAL HOTEL and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL 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.| REGAL HOTEL vs. Webster Financial | REGAL HOTEL vs. OFFICE DEPOT | REGAL HOTEL vs. Haier Smart Home | REGAL HOTEL vs. National Bank Holdings |
| Park Hotels vs. Ares Management Corp | Park Hotels vs. CeoTronics AG | Park Hotels vs. Brockhaus Capital Management | Park Hotels vs. Food Life Companies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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