Correlation Between Host Hotels and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Host Hotels and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Bankers Investment.
Diversification Opportunities for Host Hotels and Bankers Investment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Host and Bankers is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Host Hotels i.e., Host Hotels and Bankers Investment go up and down completely randomly.
Pair Corralation between Host Hotels and Bankers Investment
Assuming the 90 days trading horizon Host Hotels Resorts is expected to generate 2.9 times more return on investment than Bankers Investment. However, Host Hotels is 2.9 times more volatile than Bankers Investment Trust. It trades about 0.12 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.34 per unit of risk. If you would invest 1,779 in Host Hotels Resorts on August 31, 2024 and sell it today you would earn a total of 72.00 from holding Host Hotels Resorts or generate 4.05% 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. Bankers Investment Trust
Performance |
| Timeline |
| Host Hotels Resorts |
| Bankers Investment Trust |
Host Hotels and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Bankers Investment
The main advantage of trading using opposite Host Hotels and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Host Hotels vs. Neometals | Host Hotels vs. Coor Service Management | Host Hotels vs. Aeorema Communications Plc | Host Hotels vs. JLEN Environmental Assets |
| Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Hyundai Motor | Bankers Investment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |