Correlation Between Host Hotels and Games Workshop
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Games Workshop 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 Games Workshop 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 Games Workshop Group, you can compare the effects of market volatilities on Host Hotels and Games Workshop 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 Games Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Games Workshop.
Diversification Opportunities for Host Hotels and Games Workshop
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Host and Games is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Games Workshop Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Games Workshop 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 Games Workshop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Games Workshop Group has no effect on the direction of Host Hotels i.e., Host Hotels and Games Workshop go up and down completely randomly.
Pair Corralation between Host Hotels and Games Workshop
Assuming the 90 days trading horizon Host Hotels Resorts is expected to under-perform the Games Workshop. In addition to that, Host Hotels is 1.45 times more volatile than Games Workshop Group. It trades about -0.24 of its total potential returns per unit of risk. Games Workshop Group is currently generating about -0.03 per unit of volatility. If you would invest 1,454,000 in Games Workshop Group on November 29, 2024 and sell it today you would lose (11,000) from holding Games Workshop Group or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Host Hotels Resorts vs. Games Workshop Group
Performance |
| Timeline |
| Host Hotels Resorts |
| Games Workshop Group |
Host Hotels and Games Workshop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Games Workshop
The main advantage of trading using opposite Host Hotels and Games Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Games Workshop 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 Games Workshop will offset losses from the drop in Games Workshop's long position.| Host Hotels vs. Bigblu Broadband PLC | Host Hotels vs. Teradata Corp | Host Hotels vs. Gaztransport et Technigaz | Host Hotels vs. Extra Space Storage |
| Games Workshop vs. Auction Technology Group | Games Workshop vs. United Airlines Holdings | Games Workshop vs. Check Point Software | Games Workshop vs. Allianz Technology Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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