Correlation Between Host Hotels and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Host Hotels and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Host Hotels and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Host Hotels and Samsung Electronics.
Diversification Opportunities for Host Hotels and Samsung Electronics
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Host and Samsung is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Host Hotels Resorts and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Host Hotels i.e., Host Hotels and Samsung Electronics go up and down completely randomly.
Pair Corralation between Host Hotels and Samsung Electronics
Assuming the 90 days trading horizon Host Hotels Resorts is expected to generate 0.99 times more return on investment than Samsung Electronics. However, Host Hotels Resorts is 1.01 times less risky than Samsung Electronics. It trades about 0.02 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.05 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 Against |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Host Hotels Resorts vs. Samsung Electronics Co
Performance |
| Timeline |
| Host Hotels Resorts |
| Samsung Electronics |
Host Hotels and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Host Hotels and Samsung Electronics
The main advantage of trading using opposite Host Hotels and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Host Hotels position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' 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 |
| Samsung Electronics vs. iShares Physical Silver | Samsung Electronics vs. Verizon Communications | Samsung Electronics vs. Blackrock World Mining | Samsung Electronics vs. AfriTin Mining |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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