Correlation Between DMG Mori and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both DMG Mori and Xenia Hotels 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 DMG Mori and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMG Mori Co and Xenia Hotels Resorts, you can compare the effects of market volatilities on DMG Mori and Xenia Hotels 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 DMG Mori with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMG Mori and Xenia Hotels.
Diversification Opportunities for DMG Mori and Xenia Hotels
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DMG and Xenia is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding DMG Mori Co and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and DMG Mori 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 DMG Mori Co are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of DMG Mori i.e., DMG Mori and Xenia Hotels go up and down completely randomly.
Pair Corralation between DMG Mori and Xenia Hotels
Assuming the 90 days horizon DMG Mori is expected to generate 3.44 times less return on investment than Xenia Hotels. In addition to that, DMG Mori is 1.7 times more volatile than Xenia Hotels Resorts. It trades about 0.01 of its total potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.06 per unit of volatility. If you would invest 1,120 in Xenia Hotels Resorts on September 4, 2024 and sell it today you would earn a total of 310.00 from holding Xenia Hotels Resorts or generate 27.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DMG Mori Co vs. Xenia Hotels Resorts
Performance |
| Timeline |
| DMG Mori |
| Xenia Hotels Resorts |
DMG Mori and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMG Mori and Xenia Hotels
The main advantage of trading using opposite DMG Mori and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMG Mori position performs unexpectedly, Xenia Hotels 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| DMG Mori vs. Xenia Hotels Resorts | DMG Mori vs. Hyatt Hotels | DMG Mori vs. Siamgas And Petrochemicals | DMG Mori vs. MIRAMAR HOTEL INV |
| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Ryman Hospitality Properties | Xenia Hotels vs. Park Hotels Resorts | Xenia Hotels vs. Pebblebrook Hotel 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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