Correlation Between Park Hotels and SBA Communications

Can any of the company-specific risk be diversified away by investing in both Park Hotels and SBA Communications 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 SBA Communications 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 SBA Communications Corp, you can compare the effects of market volatilities on Park Hotels and SBA Communications 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 SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Hotels and SBA Communications.

Diversification Opportunities for Park Hotels and SBA Communications

-0.03

Correlation Coefficient

Park Hotels  SBA Communications

Good diversification

The 3 months correlation between Park and SBA is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Park Hotels Resorts and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Park Hotels i.e., Park Hotels and SBA Communications go up and down completely randomly.

Pair Corralation between Park Hotels and SBA Communications

Allowing for the 90-day total investment horizon Park Hotels Resorts is expected to generate 1.55 times more return on investment than SBA Communications. However, Park Hotels is 1.55 times more volatile than SBA Communications Corp. It trades about 0.03 of its potential returns per unit of risk. SBA Communications Corp is currently generating about -0.08 per unit of risk. If you would invest  1,016  in Park Hotels Resorts on May 8, 2025 and sell it today you would earn a total of  30.00  from holding Park Hotels Resorts or generate 2.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Park Hotels Resorts  vs.  SBA Communications Corp

Park Hotels Resorts

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Park Hotels Resorts are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Park Hotels is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

SBA Communications Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days SBA Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Park Hotels and SBA Communications

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

The idea behind Park Hotels Resorts and SBA Communications Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.