Correlation Between Host Hotels and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Silvercorp Metals 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 Silvercorp Metals 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 Silvercorp Metals, you can compare the effects of market volatilities on Host Hotels and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Silvercorp Metals.
Diversification Opportunities for Host Hotels and Silvercorp Metals
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Host and Silvercorp is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Host Hotels i.e., Host Hotels and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Host Hotels and Silvercorp Metals
Assuming the 90 days trading horizon Host Hotels Resorts is expected to generate 0.31 times more return on investment than Silvercorp Metals. However, Host Hotels Resorts is 3.2 times less risky than Silvercorp Metals. It trades about 0.03 of its potential returns per unit of risk. Silvercorp Metals is currently generating about -0.29 per unit of risk. If you would invest 1,778 in Host Hotels Resorts on August 27, 2024 and sell it today you would earn a total of 12.00 from holding Host Hotels Resorts or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Silvercorp Metals
Performance |
| Timeline |
| Host Hotels Resorts |
| Silvercorp Metals |
Host Hotels and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Silvercorp Metals
The main advantage of trading using opposite Host Hotels and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.| Host Hotels vs. International Consolidated Airlines | Host Hotels vs. United Airlines Holdings | Host Hotels vs. Verizon Communications | Host Hotels vs. Ameriprise Financial |
| Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Samsung Electronics Co | Silvercorp Metals vs. Hyundai Motor | Silvercorp Metals vs. Toyota Motor Corp |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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