Correlation Between Xenia Hotels and G III
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on Xenia Hotels and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and G III.
Diversification Opportunities for Xenia Hotels and G III
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xenia and GI4 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and G III go up and down completely randomly.
Pair Corralation between Xenia Hotels and G III
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 3.04 times less return on investment than G III. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.64 times less risky than G III. It trades about 0.04 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,230 in G III Apparel Group on September 12, 2024 and sell it today you would earn a total of 1,730 from holding G III Apparel Group or generate 140.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. G III Apparel Group
Performance |
| Timeline |
| Xenia Hotels Resorts |
| G III Apparel |
Xenia Hotels and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and G III
The main advantage of trading using opposite Xenia Hotels and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, G III 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 G III will offset losses from the drop in G III'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 |
| G III vs. Strategic Education | G III vs. Magic Software Enterprises | G III vs. IDP EDUCATION LTD | G III vs. TAL Education Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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