Correlation Between Xenia Hotels and AdCapital
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and AdCapital 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 AdCapital 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 AdCapital AG, you can compare the effects of market volatilities on Xenia Hotels and AdCapital 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 AdCapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and AdCapital.
Diversification Opportunities for Xenia Hotels and AdCapital
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xenia and AdCapital is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and AdCapital AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdCapital AG 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 AdCapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdCapital AG has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and AdCapital go up and down completely randomly.
Pair Corralation between Xenia Hotels and AdCapital
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.29 times more return on investment than AdCapital. However, Xenia Hotels is 1.29 times more volatile than AdCapital AG. It trades about 0.13 of its potential returns per unit of risk. AdCapital AG is currently generating about -0.02 per unit of risk. If you would invest 1,430 in Xenia Hotels Resorts on September 13, 2024 and sell it today you would earn a total of 80.00 from holding Xenia Hotels Resorts or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. AdCapital AG
Performance |
| Timeline |
| Xenia Hotels Resorts |
| AdCapital AG |
Xenia Hotels and AdCapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and AdCapital
The main advantage of trading using opposite Xenia Hotels and AdCapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, AdCapital 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 AdCapital will offset losses from the drop in AdCapital's long position.| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Summit Hotel Properties | Xenia Hotels vs. ASHFORD HOSPITTRUST |
| AdCapital vs. Hyatt Hotels | AdCapital vs. Summit Hotel Properties | AdCapital vs. Xenia Hotels Resorts | AdCapital vs. QINGCI GAMES INC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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