Correlation Between Park Hotels and Cohen Steers

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

Diversification Opportunities for Park Hotels and Cohen Steers

-0.43

Correlation Coefficient

Park Hotels  Cohen Steers

Very good diversification

The 3 months correlation between Park and Cohen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Real has no effect on the direction of Park Hotels i.e., Park Hotels and Cohen Steers go up and down completely randomly.

Pair Corralation between Park Hotels and Cohen Steers

Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to under-perform the Cohen Steers. In addition to that, Park Hotels is 1.72 times more volatile than Cohen Steers Real. It trades about -0.2 of its total potential returns per unit of risk. Cohen Steers Real is currently generating about 0.03 per unit of volatility. If you would invest  1,735  in Cohen Steers Real on December 26, 2024 and sell it today you would earn a total of  30.00  from holding Cohen Steers Real or generate 1.73% return on investment over 90 days.

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

Park Hotels Resorts  vs.  Cohen Steers Real

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. Despite inconsistent performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Cohen Steers Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers Real are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cohen Steers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Park Hotels and Cohen Steers

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

The idea behind Park Hotels Resorts and Cohen Steers Real 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.