Correlation Between Host Hotels and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on Host Hotels and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Dalata Hotel.
Diversification Opportunities for Host Hotels and Dalata Hotel
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Host and Dalata is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Host Hotels i.e., Host Hotels and Dalata Hotel go up and down completely randomly.
Pair Corralation between Host Hotels and Dalata Hotel
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the Dalata Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Host Hotels Resorts is 1.01 times less risky than Dalata Hotel. The stock trades about -0.17 of its potential returns per unit of risk. The Dalata Hotel Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 38,500 in Dalata Hotel Group on October 23, 2024 and sell it today you would earn a total of 1,500 from holding Dalata Hotel Group or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Host Hotels Resorts vs. Dalata Hotel Group
Performance |
| Timeline |
| Host Hotels Resorts |
| Dalata Hotel Group |
Host Hotels and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Dalata Hotel
The main advantage of trading using opposite Host Hotels and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Host Hotels vs. Cardinal Health | Host Hotels vs. European Metals Holdings | Host Hotels vs. Eco Animal Health | Host Hotels vs. Omega Healthcare Investors |
| Dalata Hotel vs. Jacquet Metal Service | Dalata Hotel vs. Melia Hotels | Dalata Hotel vs. Bisichi Mining PLC | Dalata Hotel vs. Rheinmetall AG |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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