Correlation Between Park Hotels and Hersha Hospitality
Can any of the company-specific risk be diversified away by investing in both Park Hotels and Hersha Hospitality 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 Hersha Hospitality 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 Hersha Hospitality Trust, you can compare the effects of market volatilities on Park Hotels and Hersha Hospitality 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 Hersha Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and Hersha Hospitality.
Diversification Opportunities for Park Hotels and Hersha Hospitality
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Park and Hersha is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and Hersha Hospitality Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hersha Hospitality Trust 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 Hersha Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hersha Hospitality Trust has no effect on the direction of Park Hotels i.e., Park Hotels and Hersha Hospitality go up and down completely randomly.
Pair Corralation between Park Hotels and Hersha Hospitality
If you would invest 999.00 in Hersha Hospitality Trust on January 19, 2024 and sell it today you would earn a total of 0.00 from holding Hersha Hospitality Trust or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Park Hotels Resorts vs. Hersha Hospitality Trust
Performance |
| Timeline |
| Park Hotels Resorts |
| Hersha Hospitality Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Park Hotels and Hersha Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Hotels and Hersha Hospitality
The main advantage of trading using opposite Park Hotels and Hersha Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Hotels position performs unexpectedly, Hersha Hospitality 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 Hersha Hospitality will offset losses from the drop in Hersha Hospitality's long position.| Park Hotels vs. Diamondrock Hospitality | Park Hotels vs. Ryman Hospitality Properties | Park Hotels vs. Pebblebrook Hotel Trust | Park Hotels vs. RLJ Lodging Trust |
| Hersha Hospitality vs. RLJ Lodging Trust | Hersha Hospitality vs. Sunstone Hotel Investors | Hersha Hospitality vs. Pebblebrook Hotel Trust | Hersha Hospitality vs. Summit Hotel Properties |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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