Correlation Between USWE SPORTS and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and Playa Hotels Resorts, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and Playa Hotels.
Diversification Opportunities for USWE SPORTS and Playa Hotels
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USWE and Playa is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB 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 USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and Playa Hotels go up and down completely randomly.
Pair Corralation between USWE SPORTS and Playa Hotels
Assuming the 90 days horizon USWE SPORTS is expected to generate 4.3 times less return on investment than Playa Hotels. But when comparing it to its historical volatility, USWE SPORTS AB is 1.62 times less risky than Playa Hotels. It trades about 0.05 of its potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 930.00 in Playa Hotels Resorts on December 1, 2024 and sell it today you would earn a total of 340.00 from holding Playa Hotels Resorts or generate 36.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
USWE SPORTS AB vs. Playa Hotels Resorts
Performance |
Timeline |
USWE SPORTS AB |
Playa Hotels Resorts |
USWE SPORTS and Playa Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with USWE SPORTS and Playa Hotels
The main advantage of trading using opposite USWE SPORTS and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.USWE SPORTS vs. PATTIES FOODS | USWE SPORTS vs. JD SPORTS FASH | USWE SPORTS vs. DaChan Food Limited | USWE SPORTS vs. CN MODERN DAIRY |
Playa Hotels vs. China Resources Beer | Playa Hotels vs. Molson Coors Beverage | Playa Hotels vs. PATTIES FOODS | Playa Hotels vs. SCANSOURCE |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |