Correlation Between Host Hotels and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Ecofin Global 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 Ecofin Global 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 Ecofin Global Utilities, you can compare the effects of market volatilities on Host Hotels and Ecofin Global 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 Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Ecofin Global.
Diversification Opportunities for Host Hotels and Ecofin Global
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Host and Ecofin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of Host Hotels i.e., Host Hotels and Ecofin Global go up and down completely randomly.
Pair Corralation between Host Hotels and Ecofin Global
Assuming the 90 days trading horizon Host Hotels Resorts is expected to generate 1.36 times more return on investment than Ecofin Global. However, Host Hotels is 1.36 times more volatile than Ecofin Global Utilities. It trades about 0.02 of its potential returns per unit of risk. Ecofin Global Utilities is currently generating about 0.02 per unit of risk. If you would invest 1,621 in Host Hotels Resorts on October 24, 2024 and sell it today you would earn a total of 101.00 from holding Host Hotels Resorts or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Host Hotels Resorts vs. Ecofin Global Utilities
Performance |
| Timeline |
| Host Hotels Resorts |
| Ecofin Global Utilities |
Host Hotels and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Ecofin Global
The main advantage of trading using opposite Host Hotels and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.| Host Hotels vs. Silver Bullet Data | Host Hotels vs. Sparebank 1 SR | Host Hotels vs. Manulife Financial Corp | Host Hotels vs. Gaming Realms plc |
| Ecofin Global vs. Wizz Air Holdings | Ecofin Global vs. AcadeMedia AB | Ecofin Global vs. Universal Display Corp | Ecofin Global vs. Ryanair Holdings plc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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