Correlation Between Bannerman Resources and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Bannerman Resources and Playa Hotels 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 Bannerman Resources and Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bannerman Resources Limited and Playa Hotels Resorts, you can compare the effects of market volatilities on Bannerman Resources and Playa Hotels 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 Bannerman Resources with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bannerman Resources and Playa Hotels.
Diversification Opportunities for Bannerman Resources and Playa Hotels
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bannerman and Playa is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bannerman Resources Limited and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts and Bannerman Resources 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 Bannerman Resources Limited are associated (or correlated) with Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Bannerman Resources i.e., Bannerman Resources and Playa Hotels go up and down completely randomly.
Pair Corralation between Bannerman Resources and Playa Hotels
Assuming the 90 days horizon Bannerman Resources Limited is expected to under-perform the Playa Hotels. In addition to that, Bannerman Resources is 1.32 times more volatile than Playa Hotels Resorts. It trades about 0.0 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.19 per unit of volatility. If you would invest 695.00 in Playa Hotels Resorts on September 25, 2024 and sell it today you would earn a total of 210.00 from holding Playa Hotels Resorts or generate 30.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Bannerman Resources Limited vs. Playa Hotels Resorts
Performance |
Timeline |
Bannerman Resources |
Playa Hotels Resorts |
Bannerman Resources and Playa Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bannerman Resources and Playa Hotels
The main advantage of trading using opposite Bannerman Resources and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bannerman Resources position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.Bannerman Resources vs. Playa Hotels Resorts | Bannerman Resources vs. Cleanaway Waste Management | Bannerman Resources vs. InPlay Oil Corp | Bannerman Resources vs. Ultra Clean Holdings |
Playa Hotels vs. CHINA TELECOM H | Playa Hotels vs. Major Drilling Group | Playa Hotels vs. Comba Telecom Systems | Playa Hotels vs. MINCO SILVER |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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