Correlation Between Xenia Hotels and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Gaztransport Technigaz 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 Xenia Hotels and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xenia Hotels Resorts and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Xenia Hotels and Gaztransport Technigaz 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 Xenia Hotels with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Gaztransport Technigaz.
Diversification Opportunities for Xenia Hotels and Gaztransport Technigaz
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and Gaztransport is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Xenia 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 Xenia Hotels Resorts are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Xenia Hotels and Gaztransport Technigaz
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.07 times more return on investment than Gaztransport Technigaz. However, Xenia Hotels is 1.07 times more volatile than Gaztransport Technigaz SA. It trades about 0.06 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.02 per unit of risk. If you would invest 1,276 in Xenia Hotels Resorts on September 5, 2024 and sell it today you would earn a total of 164.00 from holding Xenia Hotels Resorts or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Gaztransport Technigaz |
Xenia Hotels and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Gaztransport Technigaz
The main advantage of trading using opposite Xenia Hotels and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Xenia Hotels vs. BE Semiconductor Industries | Xenia Hotels vs. Tower Semiconductor | Xenia Hotels vs. CarsalesCom | Xenia Hotels vs. CANON MARKETING JP |
| Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings | Gaztransport Technigaz vs. Origin Agritech | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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