Correlation Between Park Hotels and RATIONAL Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Park Hotels and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellschaft, you can compare the effects of market volatilities on Park Hotels and RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and RATIONAL Aktiengesellscha.

Diversification Opportunities for Park Hotels and RATIONAL Aktiengesellscha

-0.1

Correlation Coefficient

Park Hotels  RATIONAL Aktiengesellscha

Good diversification

The 3 months correlation between Park and RATIONAL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and RATIONAL Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATIONAL Aktiengesellscha 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 RATIONAL Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATIONAL Aktiengesellscha has no effect on the direction of Park Hotels i.e., Park Hotels and RATIONAL Aktiengesellscha go up and down completely randomly.

Pair Corralation between Park Hotels and RATIONAL Aktiengesellscha

Assuming the 90 days trading horizon Park Hotels Resorts is expected to under-perform the RATIONAL Aktiengesellscha. In addition to that, Park Hotels is 1.46 times more volatile than RATIONAL Aktiengesellschaft. It trades about -0.12 of its total potential returns per unit of risk. RATIONAL Aktiengesellschaft is currently generating about -0.01 per unit of volatility. If you would invest  84,600  in RATIONAL Aktiengesellschaft on October 25, 2024 and sell it today you would lose (250.00) from holding RATIONAL Aktiengesellschaft or give up 0.3% of portfolio value over 90 days.

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

Park Hotels Resorts  vs.  RATIONAL Aktiengesellschaft

Park Hotels Resorts

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Park Hotels Resorts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Park Hotels may actually be approaching a critical reversion point that can send shares even higher in February 2025.

RATIONAL Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RATIONAL Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Park Hotels and RATIONAL Aktiengesellscha

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

The idea behind Park Hotels Resorts and RATIONAL Aktiengesellschaft 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.