Correlation Between Wheeler Real and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Wheeler Real 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 Wheeler Real and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheeler Real Estate and Park Hotels Resorts, you can compare the effects of market volatilities on Wheeler Real 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 Wheeler Real with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheeler Real and Park Hotels.
Diversification Opportunities for Wheeler Real and Park Hotels
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wheeler and Park is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate 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 Wheeler Real 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 Wheeler Real Estate 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 Wheeler Real i.e., Wheeler Real and Park Hotels go up and down completely randomly.
Pair Corralation between Wheeler Real and Park Hotels
Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Park Hotels. In addition to that, Wheeler Real is 9.52 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 0.05 per unit of volatility. If you would invest 1,022 in Park Hotels Resorts on August 23, 2024 and sell it today you would earn a total of 446.00 from holding Park Hotels Resorts or generate 43.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheeler Real Estate vs. Park Hotels Resorts
Performance |
| Timeline |
| Wheeler Real Estate |
| Park Hotels Resorts |
Wheeler Real and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheeler Real and Park Hotels
The main advantage of trading using opposite Wheeler Real and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheeler Real 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.| Wheeler Real vs. CBL Associates Properties | Wheeler Real vs. Cedar Realty Trust | Wheeler Real vs. Macerich Company | Wheeler Real vs. Simon Property Group |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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