Correlation Between ZhongAn Online and Park Hotels
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online 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 ZhongAn Online and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and Park Hotels Resorts, you can compare the effects of market volatilities on ZhongAn Online 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 ZhongAn Online with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and Park Hotels.
Diversification Opportunities for ZhongAn Online and Park Hotels
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZhongAn and Park is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P 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 ZhongAn Online 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 ZhongAn Online P 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 ZhongAn Online i.e., ZhongAn Online and Park Hotels go up and down completely randomly.
Pair Corralation between ZhongAn Online and Park Hotels
Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the Park Hotels. In addition to that, ZhongAn Online is 1.35 times more volatile than Park Hotels Resorts. It trades about -0.13 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.07 per unit of volatility. If you would invest 1,217 in Park Hotels Resorts on October 10, 2024 and sell it today you would earn a total of 93.00 from holding Park Hotels Resorts or generate 7.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ZhongAn Online P vs. Park Hotels Resorts
Performance |
Timeline |
ZhongAn Online P |
Park Hotels Resorts |
ZhongAn Online and Park Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ZhongAn Online and Park Hotels
The main advantage of trading using opposite ZhongAn Online and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online 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.ZhongAn Online vs. Singapore Telecommunications Limited | ZhongAn Online vs. BOS BETTER ONLINE | ZhongAn Online vs. Shenandoah Telecommunications | ZhongAn Online vs. MUTUIONLINE |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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