Correlation Between Xenia Hotels and Chiba Bank
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Chiba Bank 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 Chiba Bank 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 Chiba Bank, you can compare the effects of market volatilities on Xenia Hotels and Chiba Bank 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 Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Chiba Bank.
Diversification Opportunities for Xenia Hotels and Chiba Bank
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xenia and Chiba is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Chiba Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank 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 Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Chiba Bank go up and down completely randomly.
Pair Corralation between Xenia Hotels and Chiba Bank
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 3.32 times less return on investment than Chiba Bank. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.7 times less risky than Chiba Bank. It trades about 0.03 of its potential returns per unit of risk. Chiba Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 424.00 in Chiba Bank on September 26, 2024 and sell it today you would earn a total of 311.00 from holding Chiba Bank or generate 73.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Chiba Bank
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Chiba Bank |
Xenia Hotels and Chiba Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Chiba Bank
The main advantage of trading using opposite Xenia Hotels and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Chiba Bank 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.| Xenia Hotels vs. North American Construction | Xenia Hotels vs. Perseus Mining Limited | Xenia Hotels vs. Harmony Gold Mining | Xenia Hotels vs. TITAN MACHINERY |
| Chiba Bank vs. Dalata Hotel Group | Chiba Bank vs. Canadian Utilities Limited | Chiba Bank vs. United Utilities Group | Chiba Bank vs. Xenia Hotels Resorts |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |