Correlation Between Xenia Hotels and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on Xenia Hotels and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Safestore Holdings.
Diversification Opportunities for Xenia Hotels and Safestore Holdings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xenia and Safestore is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Safestore Holdings go up and down completely randomly.
Pair Corralation between Xenia Hotels and Safestore Holdings
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 0.71 times more return on investment than Safestore Holdings. However, Xenia Hotels Resorts is 1.41 times less risky than Safestore Holdings. It trades about -0.03 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.19 per unit of risk. If you would invest 1,448 in Xenia Hotels Resorts on October 28, 2024 and sell it today you would lose (38.00) from holding Xenia Hotels Resorts or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Safestore Holdings plc
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Safestore Holdings plc |
Xenia Hotels and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Safestore Holdings
The main advantage of trading using opposite Xenia Hotels and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| Xenia Hotels vs. Quaker Chemical | Xenia Hotels vs. Sanyo Chemical Industries | Xenia Hotels vs. China BlueChemical | Xenia Hotels vs. Norwegian Air Shuttle |
| Safestore Holdings vs. Lyxor 1 | Safestore Holdings vs. Xtrackers LevDAX | Safestore Holdings vs. Xtrackers ShortDAX | Safestore Holdings vs. Superior Plus Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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