Correlation Between Park Hotels and Ion Beam

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

Diversification Opportunities for Park Hotels and Ion Beam

-0.09

Correlation Coefficient

Park Hotels  Ion Beam

Good diversification

The 3 months correlation between Park and Ion is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications 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 Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Park Hotels i.e., Park Hotels and Ion Beam go up and down completely randomly.

Pair Corralation between Park Hotels and Ion Beam

Assuming the 90 days trading horizon Park Hotels Resorts is expected to under-perform the Ion Beam. In addition to that, Park Hotels is 1.57 times more volatile than Ion Beam Applications. It trades about -0.03 of its total potential returns per unit of risk. Ion Beam Applications is currently generating about -0.01 per unit of volatility. If you would invest  1,344  in Ion Beam Applications on September 27, 2024 and sell it today you would lose (5.00) from holding Ion Beam Applications or give up 0.37% 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.  Ion Beam Applications

Park Hotels Resorts

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Park Hotels Resorts are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Park Hotels is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ion Beam Applications

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ion Beam Applications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ion Beam is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Park Hotels and Ion Beam

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

The idea behind Park Hotels Resorts and Ion Beam Applications 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.