Correlation Between Park Hotels and ZhongAn Online

Can any of the company-specific risk be diversified away by investing in both Park Hotels and ZhongAn Online 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 Park Hotels and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Park Hotels Resorts and ZhongAn Online P, you can compare the effects of market volatilities on Park Hotels and ZhongAn Online 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 Park Hotels with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and ZhongAn Online.

Diversification Opportunities for Park Hotels and ZhongAn Online

-0.32

Correlation Coefficient

Park Hotels  ZhongAn Online

Very good diversification

The 3 months correlation between Park and ZhongAn is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and Park Hotels 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 Park Hotels Resorts are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Park Hotels i.e., Park Hotels and ZhongAn Online go up and down completely randomly.

Pair Corralation between Park Hotels and ZhongAn Online

Assuming the 90 days trading horizon Park Hotels Resorts is expected to under-perform the ZhongAn Online. But the stock apears to be less risky and, when comparing its historical volatility, Park Hotels Resorts is 2.41 times less risky than ZhongAn Online. The stock trades about -0.23 of its potential returns per unit of risk. The ZhongAn Online P is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  143.00  in ZhongAn Online P on December 22, 2024 and sell it today you would earn a total of  15.00  from holding ZhongAn Online P or generate 10.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Park Hotels Resorts  vs.  ZhongAn Online P

Park Hotels Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Park Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ZhongAn Online P

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZhongAn Online P are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ZhongAn Online unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Park Hotels and ZhongAn Online

The main advantage of trading using opposite Park Hotels and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.

The idea behind Park Hotels Resorts and ZhongAn Online P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.