Correlation Between BPCEGP and Playa Hotels

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

By analyzing existing cross correlation between BPCEGP 5748 19 JUL 33 and Playa Hotels Resorts, you can compare the effects of market volatilities on BPCEGP 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 BPCEGP with a short position of Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPCEGP and Playa Hotels.

Diversification Opportunities for BPCEGP and Playa Hotels

0.59

Correlation Coefficient

BPCEGP  Playa Hotels

Very weak diversification

The 3 months correlation between BPCEGP and Playa is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BPCEGP 5748 19 JUL 33 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 BPCEGP 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 BPCEGP 5748 19 JUL 33 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 BPCEGP i.e., BPCEGP and Playa Hotels go up and down completely randomly.

Pair Corralation between BPCEGP and Playa Hotels

Assuming the 90 days trading horizon BPCEGP 5748 19 JUL 33 is expected to under-perform the Playa Hotels. But the bond apears to be less risky and, when comparing its historical volatility, BPCEGP 5748 19 JUL 33 is 1.37 times less risky than Playa Hotels. The bond trades about -0.21 of its potential returns per unit of risk. The Playa Hotels Resorts is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  771.00  in Playa Hotels Resorts on September 4, 2024 and sell it today you would earn a total of  209.00  from holding Playa Hotels Resorts or generate 27.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	22.22%
Values	Daily Returns

BPCEGP 5748 19 JUL 33  vs.  Playa Hotels Resorts

BPCEGP 5748 19

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BPCEGP 5748 19 JUL 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for BPCEGP 5748 19 JUL 33 investors.

Playa Hotels Resorts

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Playa Hotels Resorts are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Playa Hotels sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BPCEGP and Playa Hotels

The main advantage of trading using opposite BPCEGP and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPCEGP 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.

The idea behind BPCEGP 5748 19 JUL 33 and Playa 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.