Correlation Between Xenia Hotels and Envela Corp
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Envela Corp 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 Envela Corp 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 Envela Corp, you can compare the effects of market volatilities on Xenia Hotels and Envela Corp 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 Envela Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Envela Corp.
Diversification Opportunities for Xenia Hotels and Envela Corp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xenia and Envela is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Envela Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envela Corp 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 Envela Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envela Corp has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Envela Corp go up and down completely randomly.
Pair Corralation between Xenia Hotels and Envela Corp
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 10.3 times less return on investment than Envela Corp. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.38 times less risky than Envela Corp. It trades about 0.04 of its potential returns per unit of risk. Envela Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 565.00 in Envela Corp on October 17, 2024 and sell it today you would earn a total of 105.00 from holding Envela Corp or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.76% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Envela Corp
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Envela Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Xenia Hotels and Envela Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Envela Corp
The main advantage of trading using opposite Xenia Hotels and Envela Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Envela Corp 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 Envela Corp will offset losses from the drop in Envela Corp's long position.| Xenia Hotels vs. TRADEGATE | Xenia Hotels vs. Tradeweb Markets | Xenia Hotels vs. Fast Retailing Co | Xenia Hotels vs. Perseus Mining Limited |
| Envela Corp vs. CREO MEDICAL GRP | Envela Corp vs. Waste Management | Envela Corp vs. Tsingtao Brewery | Envela Corp vs. MeVis Medical Solutions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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