Correlation Between Xenia Hotels and NH HOTEL
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and NH HOTEL 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 NH HOTEL 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 NH HOTEL GROUP, you can compare the effects of market volatilities on Xenia Hotels and NH HOTEL 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 NH HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and NH HOTEL.
Diversification Opportunities for Xenia Hotels and NH HOTEL
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xenia and NH5 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and NH HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH HOTEL GROUP 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 NH HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH HOTEL GROUP has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and NH HOTEL go up and down completely randomly.
Pair Corralation between Xenia Hotels and NH HOTEL
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 0.72 times more return on investment than NH HOTEL. However, Xenia Hotels Resorts is 1.4 times less risky than NH HOTEL. It trades about 0.05 of its potential returns per unit of risk. NH HOTEL GROUP is currently generating about 0.02 per unit of risk. If you would invest 1,296 in Xenia Hotels Resorts on September 1, 2024 and sell it today you would earn a total of 134.00 from holding Xenia Hotels Resorts or generate 10.34% 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. NH HOTEL GROUP
Performance |
| Timeline |
| Xenia Hotels Resorts |
| NH HOTEL GROUP |
Xenia Hotels and NH HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and NH HOTEL
The main advantage of trading using opposite Xenia Hotels and NH HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, NH HOTEL 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 NH HOTEL will offset losses from the drop in NH HOTEL's long position.| Xenia Hotels vs. CARSALESCOM | Xenia Hotels vs. SMA Solar Technology | Xenia Hotels vs. Tradeweb Markets | Xenia Hotels vs. AECOM TECHNOLOGY |
| NH HOTEL vs. SIVERS SEMICONDUCTORS AB | NH HOTEL vs. Darden Restaurants | NH HOTEL vs. Reliance Steel Aluminum | NH HOTEL vs. Q2M Managementberatung AG |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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