Correlation Between Norman Broadbent and Park Hotels

Can any of the company-specific risk be diversified away by investing in both Norman Broadbent and Park 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 Norman Broadbent and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Norman Broadbent Plc and Park Hotels Resorts, you can compare the effects of market volatilities on Norman Broadbent and Park 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 Norman Broadbent with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norman Broadbent and Park Hotels.

Diversification Opportunities for Norman Broadbent and Park Hotels

-0.75

Correlation Coefficient

Norman Broadbent  Park Hotels

Pay attention - limited upside

The 3 months correlation between Norman and Park is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Norman Broadbent Plc and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts and Norman Broadbent 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 Norman Broadbent Plc are associated (or correlated) with Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Norman Broadbent i.e., Norman Broadbent and Park Hotels go up and down completely randomly.

Pair Corralation between Norman Broadbent and Park Hotels

Assuming the 90 days trading horizon Norman Broadbent is expected to generate 2.29 times less return on investment than Park Hotels. But when comparing it to its historical volatility, Norman Broadbent Plc is 1.11 times less risky than Park Hotels. It trades about 0.02 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  953.00  in Park Hotels Resorts on September 12, 2024 and sell it today you would earn a total of  624.00  from holding Park Hotels Resorts or generate 65.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.96%
Values	Daily Returns

Norman Broadbent Plc  vs.  Park Hotels Resorts

Norman Broadbent Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norman Broadbent Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Park Hotels Resorts

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Park Hotels Resorts are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Park Hotels unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Norman Broadbent and Park Hotels

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

The idea behind Norman Broadbent Plc and Park Hotels Resorts 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 Transaction History module to view history of all your transactions and understand their impact on performance.