Correlation Between VICI Properties and Park Hotels
Can any of the company-specific risk be diversified away by investing in both VICI Properties 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 VICI Properties and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VICI Properties and Park Hotels Resorts, you can compare the effects of market volatilities on VICI Properties 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 VICI Properties with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and Park Hotels.
Diversification Opportunities for VICI Properties and Park Hotels
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VICI and Park is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties 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 VICI Properties 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 VICI Properties 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 VICI Properties i.e., VICI Properties and Park Hotels go up and down completely randomly.
Pair Corralation between VICI Properties and Park Hotels
Given the investment horizon of 90 days VICI Properties is expected to generate 5.47 times less return on investment than Park Hotels. But when comparing it to its historical volatility, VICI Properties is 1.75 times less risky than Park Hotels. It trades about 0.02 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Park Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 538.00 from holding Park Hotels Resorts or generate 55.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VICI Properties vs. Park Hotels Resorts
Performance |
| Timeline |
| VICI Properties |
| Park Hotels Resorts |
VICI Properties and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VICI Properties and Park Hotels
The main advantage of trading using opposite VICI Properties and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties 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.| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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