Correlation Between Xenia Hotels and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and NAKED WINES 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 NAKED WINES 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 NAKED WINES PLC, you can compare the effects of market volatilities on Xenia Hotels and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and NAKED WINES.
Diversification Opportunities for Xenia Hotels and NAKED WINES
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xenia and NAKED is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and NAKED WINES go up and down completely randomly.
Pair Corralation between Xenia Hotels and NAKED WINES
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to under-perform the NAKED WINES. But the stock apears to be less risky and, when comparing its historical volatility, Xenia Hotels Resorts is 2.59 times less risky than NAKED WINES. The stock trades about -0.06 of its potential returns per unit of risk. The NAKED WINES PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 53.00 in NAKED WINES PLC on October 26, 2024 and sell it today you would earn a total of 1.00 from holding NAKED WINES PLC or generate 1.89% 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. NAKED WINES PLC
Performance |
| Timeline |
| Xenia Hotels Resorts |
| NAKED WINES PLC |
Xenia Hotels and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and NAKED WINES
The main advantage of trading using opposite Xenia Hotels and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES's long position.| Xenia Hotels vs. NTG Nordic Transport | Xenia Hotels vs. TITANIUM TRANSPORTGROUP | Xenia Hotels vs. Broadcom | Xenia Hotels vs. DICKS Sporting Goods |
| NAKED WINES vs. MCEWEN MINING INC | NAKED WINES vs. Eurasia Mining Plc | NAKED WINES vs. Semiconductor Manufacturing International | NAKED WINES vs. NorAm Drilling AS |
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 Stocks Directory module to find actively traded stocks across global markets.
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