Correlation Between Alstria Office and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Host 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 Alstria Office and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and Host Hotels Resorts, you can compare the effects of market volatilities on Alstria Office and Host 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 Alstria Office with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Host Hotels.
Diversification Opportunities for Alstria Office and Host Hotels
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alstria and Host is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Alstria Office 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 alstria office REIT AG are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Alstria Office i.e., Alstria Office and Host Hotels go up and down completely randomly.
Pair Corralation between Alstria Office and Host Hotels
Assuming the 90 days trading horizon alstria office REIT AG is expected to generate 2.82 times more return on investment than Host Hotels. However, Alstria Office is 2.82 times more volatile than Host Hotels Resorts. It trades about 0.09 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.0 per unit of risk. If you would invest 357.00 in alstria office REIT AG on September 20, 2024 and sell it today you would earn a total of 412.00 from holding alstria office REIT AG or generate 115.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Host Hotels Resorts
Performance |
| Timeline |
| alstria office REIT |
| Host Hotels Resorts |
Alstria Office and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Host Hotels
The main advantage of trading using opposite Alstria Office and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Host 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Alstria Office vs. Batm Advanced Communications | Alstria Office vs. MTI Wireless Edge | Alstria Office vs. Infrastrutture Wireless Italiane | Alstria Office vs. Axway Software SA |
| Host Hotels vs. Samsung Electronics Co | Host Hotels vs. Samsung Electronics Co | Host Hotels vs. Hyundai Motor | Host Hotels vs. Reliance Industries Ltd |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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