Correlation Between Xenia Hotels and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Host Hotels 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 Host Hotels 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 Host Hotels Resorts, you can compare the effects of market volatilities on Xenia Hotels and Host Hotels 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 Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Host Hotels.
Diversification Opportunities for Xenia Hotels and Host Hotels
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xenia and Host is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts 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 Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Host Hotels go up and down completely randomly.
Pair Corralation between Xenia Hotels and Host Hotels
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.02 times more return on investment than Host Hotels. However, Xenia Hotels is 1.02 times more volatile than Host Hotels Resorts. It trades about 0.04 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about 0.01 per unit of risk. If you would invest 1,266 in Xenia Hotels Resorts on August 25, 2024 and sell it today you would earn a total of 114.00 from holding Xenia Hotels Resorts or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Host Hotels Resorts
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Host Hotels Resorts |
Xenia Hotels and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Host Hotels
The main advantage of trading using opposite Xenia Hotels and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' 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 |
| Host Hotels vs. DELTA AIR LINES | Host Hotels vs. Tower One Wireless | Host Hotels vs. Altair Engineering | Host Hotels vs. 24SEVENOFFICE GROUP 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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