Correlation Between Host Hotels and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Sealed Air 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 Host Hotels and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Host Hotels Resorts and Sealed Air Corp, you can compare the effects of market volatilities on Host Hotels and Sealed Air 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 Host Hotels with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Sealed Air.
Diversification Opportunities for Host Hotels and Sealed Air
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Host and Sealed is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp and Host 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 Host Hotels Resorts are associated (or correlated) with Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Host Hotels i.e., Host Hotels and Sealed Air go up and down completely randomly.
Pair Corralation between Host Hotels and Sealed Air
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the Sealed Air. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.39 times less risky than Sealed Air. The stock trades about -0.2 of its potential returns per unit of risk. The Sealed Air Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,426 in Sealed Air Corp on November 7, 2024 and sell it today you would earn a total of 8.00 from holding Sealed Air Corp or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Host Hotels Resorts vs. Sealed Air Corp
Performance |
| Timeline |
| Host Hotels Resorts |
| Sealed Air Corp |
Host Hotels and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Sealed Air
The main advantage of trading using opposite Host Hotels and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Host Hotels vs. Automatic Data Processing | Host Hotels vs. Cornish Metals | Host Hotels vs. Eastinco Mining Exploration | Host Hotels vs. Jupiter Fund Management |
| Sealed Air vs. Fulcrum Metals PLC | Sealed Air vs. GreenX Metals | Sealed Air vs. Scandinavian Tobacco Group | Sealed Air vs. Liontrust Asset Management |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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