Correlation Between Winnebago Industries and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries and Playa 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 Winnebago Industries and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and Playa Hotels Resorts, you can compare the effects of market volatilities on Winnebago Industries and Playa 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 Winnebago Industries with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and Playa Hotels.
Diversification Opportunities for Winnebago Industries and Playa Hotels
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Winnebago and Playa is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts and Winnebago Industries 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 Winnebago Industries are associated (or correlated) with Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Winnebago Industries i.e., Winnebago Industries and Playa Hotels go up and down completely randomly.
Pair Corralation between Winnebago Industries and Playa Hotels
Assuming the 90 days horizon Winnebago Industries is expected to generate 1.94 times more return on investment than Playa Hotels. However, Winnebago Industries is 1.94 times more volatile than Playa Hotels Resorts. It trades about 0.03 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about -0.09 per unit of risk. If you would invest 4,585 in Winnebago Industries on November 1, 2024 and sell it today you would earn a total of 55.00 from holding Winnebago Industries or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Winnebago Industries vs. Playa Hotels Resorts
Performance |
| Timeline |
| Winnebago Industries |
| Playa Hotels Resorts |
Winnebago Industries and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and Playa Hotels
The main advantage of trading using opposite Winnebago Industries and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries position performs unexpectedly, Playa 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Winnebago Industries vs. PLAYMATES TOYS | Winnebago Industries vs. 24SEVENOFFICE GROUP AB | Winnebago Industries vs. Playa Hotels Resorts | Winnebago Industries vs. TRAVEL LEISURE DL 01 |
| Playa Hotels vs. URBAN OUTFITTERS | Playa Hotels vs. Siemens Healthineers AG | Playa Hotels vs. UNIVMUSIC GRPADR050 | Playa Hotels vs. CLOVER HEALTH INV |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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