Correlation Between Xenia Hotels and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on Xenia Hotels and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Strategic Investments.
Diversification Opportunities for Xenia Hotels and Strategic Investments
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xenia and Strategic is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Strategic Investments go up and down completely randomly.
Pair Corralation between Xenia Hotels and Strategic Investments
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 0.67 times more return on investment than Strategic Investments. However, Xenia Hotels Resorts is 1.5 times less risky than Strategic Investments. It trades about 0.13 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.2 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Strategic Investments AS
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Strategic Investments |
Xenia Hotels and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Strategic Investments
The main advantage of trading using opposite Xenia Hotels and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' 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 |
| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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