Correlation Between Vornado Realty and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Vornado Realty 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 Vornado Realty and Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vornado Realty Trust and Park Hotels Resorts, you can compare the effects of market volatilities on Vornado Realty 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 Vornado Realty with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vornado Realty and Park Hotels.
Diversification Opportunities for Vornado Realty and Park Hotels
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vornado and Park is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vornado Realty Trust 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 Vornado Realty 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 Vornado Realty Trust 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 Vornado Realty i.e., Vornado Realty and Park Hotels go up and down completely randomly.
Pair Corralation between Vornado Realty and Park Hotels
Considering the 90-day investment horizon Vornado Realty Trust is expected to under-perform the Park Hotels. In addition to that, Vornado Realty is 1.88 times more volatile than Park Hotels Resorts. It trades about -0.1 of its total potential returns per unit of risk. Park Hotels Resorts is currently generating about -0.18 per unit of volatility. If you would invest 1,679 in Park Hotels Resorts on February 13, 2024 and sell it today you would lose (95.00) from holding Park Hotels Resorts or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vornado Realty Trust vs. Park Hotels Resorts
Performance |
| Timeline |
| Vornado Realty Trust |
| Park Hotels Resorts |
Vornado Realty and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vornado Realty and Park Hotels
The main advantage of trading using opposite Vornado Realty and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vornado Realty 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.| Vornado Realty vs. Equity Commonwealth | Vornado Realty vs. Piedmont Office Realty | Vornado Realty vs. Hudson Pacific Properties |
| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. RLJ Lodging Trust |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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