Correlation Between Playa Hotels and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both Playa Hotels and GREENX METALS 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 Playa Hotels and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and GREENX METALS LTD, you can compare the effects of market volatilities on Playa Hotels and GREENX METALS 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 Playa Hotels with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and GREENX METALS.
Diversification Opportunities for Playa Hotels and GREENX METALS
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Playa and GREENX is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and Playa 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 Playa Hotels Resorts are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Playa Hotels i.e., Playa Hotels and GREENX METALS go up and down completely randomly.
Pair Corralation between Playa Hotels and GREENX METALS
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 0.41 times more return on investment than GREENX METALS. However, Playa Hotels Resorts is 2.44 times less risky than GREENX METALS. It trades about 0.06 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.01 per unit of risk. If you would invest 580.00 in Playa Hotels Resorts on September 24, 2024 and sell it today you would earn a total of 340.00 from holding Playa Hotels Resorts or generate 58.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Playa Hotels Resorts vs. GREENX METALS LTD
Performance |
Timeline |
Playa Hotels Resorts |
GREENX METALS LTD |
Playa Hotels and GREENX METALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Playa Hotels and GREENX METALS
The main advantage of trading using opposite Playa Hotels and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.Playa Hotels vs. GRIFFIN MINING LTD | Playa Hotels vs. Data3 Limited | Playa Hotels vs. INFORMATION SVC GRP | Playa Hotels vs. LION ONE METALS |
GREENX METALS vs. CORONGLRES CDIS101 | GREENX METALS vs. MONGOLIAN MINING CRPREGS | GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. AJ LUCAS GROUP |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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