Correlation Between Xenia Hotels and BW LPG
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and BW LPG 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 BW LPG 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 BW LPG Limited, you can compare the effects of market volatilities on Xenia Hotels and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and BW LPG.
Diversification Opportunities for Xenia Hotels and BW LPG
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenia and BW9 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited 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 BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and BW LPG go up and down completely randomly.
Pair Corralation between Xenia Hotels and BW LPG
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 0.84 times more return on investment than BW LPG. However, Xenia Hotels Resorts is 1.19 times less risky than BW LPG. It trades about 0.19 of its potential returns per unit of risk. BW LPG Limited is currently generating about -0.08 per unit of risk. If you would invest 1,410 in Xenia Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 120.00 from holding Xenia Hotels Resorts or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. BW LPG Limited
Performance |
| Timeline |
| Xenia Hotels Resorts |
| BW LPG Limited |
Xenia Hotels and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and BW LPG
The main advantage of trading using opposite Xenia Hotels and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| Xenia Hotels vs. Altair Engineering | Xenia Hotels vs. Westinghouse Air Brake | Xenia Hotels vs. Flutter Entertainment PLC | Xenia Hotels vs. PARKEN Sport Entertainment |
| BW LPG vs. X FAB Silicon Foundries | BW LPG vs. DALATA HOTEL | BW LPG vs. Xenia Hotels Resorts | BW LPG vs. PTT Global Chemical |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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