Correlation Between Park Hotels and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on Park Hotels and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Lifevantage.
Diversification Opportunities for Park Hotels and Lifevantage
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and Lifevantage is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Park Hotels i.e., Park Hotels and Lifevantage go up and down completely randomly.
Pair Corralation between Park Hotels and Lifevantage
Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to under-perform the Lifevantage. But the stock apears to be less risky and, when comparing its historical volatility, Park Hotels Resorts is 4.02 times less risky than Lifevantage. The stock trades about -0.22 of its potential returns per unit of risk. The Lifevantage is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,484 in Lifevantage on December 3, 2024 and sell it today you would earn a total of 233.00 from holding Lifevantage or generate 15.7% 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. Lifevantage
Performance |
Timeline |
Park Hotels Resorts |
Lifevantage |
Park Hotels and Lifevantage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Park Hotels and Lifevantage
The main advantage of trading using opposite Park Hotels and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. Sunstone Hotel Investors |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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