Correlation Between Xenia Hotels and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and MELIA 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 MELIA 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 MELIA HOTELS, you can compare the effects of market volatilities on Xenia Hotels and MELIA 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 MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and MELIA HOTELS.
Diversification Opportunities for Xenia Hotels and MELIA HOTELS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xenia and MELIA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS 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 MELIA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELIA HOTELS has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and MELIA HOTELS go up and down completely randomly.
Pair Corralation between Xenia Hotels and MELIA HOTELS
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 0.99 times more return on investment than MELIA HOTELS. However, Xenia Hotels Resorts is 1.01 times less risky than MELIA HOTELS. It trades about -0.11 of its potential returns per unit of risk. MELIA HOTELS is currently generating about -0.23 per unit of risk. If you would invest 1,467 in Xenia Hotels Resorts on October 24, 2024 and sell it today you would lose (47.00) from holding Xenia Hotels Resorts or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. MELIA HOTELS
Performance |
| Timeline |
| Xenia Hotels Resorts |
| MELIA HOTELS |
Xenia Hotels and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and MELIA HOTELS
The main advantage of trading using opposite Xenia Hotels and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, MELIA 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 MELIA HOTELS will offset losses from the drop in MELIA HOTELS's long position.| Xenia Hotels vs. BW OFFSHORE LTD | Xenia Hotels vs. Zijin Mining Group | Xenia Hotels vs. SBM OFFSHORE | Xenia Hotels vs. TEXAS ROADHOUSE |
| MELIA HOTELS vs. Park Hotels Resorts | MELIA HOTELS vs. Hyatt Hotels | MELIA HOTELS vs. Air Transport Services | MELIA HOTELS vs. SOEDER SPORTFISKE 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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