Correlation Between Xenia Hotels and TEXAS ROADHOUSE
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE 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 TEXAS ROADHOUSE, you can compare the effects of market volatilities on Xenia Hotels and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and TEXAS ROADHOUSE.
Diversification Opportunities for Xenia Hotels and TEXAS ROADHOUSE
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and TEXAS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and TEXAS ROADHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEXAS ROADHOUSE has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and TEXAS ROADHOUSE go up and down completely randomly.
Pair Corralation between Xenia Hotels and TEXAS ROADHOUSE
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.14 times more return on investment than TEXAS ROADHOUSE. However, Xenia Hotels is 1.14 times more volatile than TEXAS ROADHOUSE. It trades about 0.23 of its potential returns per unit of risk. TEXAS ROADHOUSE is currently generating about -0.09 per unit of risk. If you would invest 1,380 in Xenia Hotels Resorts on September 20, 2024 and sell it today you would earn a total of 130.00 from holding Xenia Hotels Resorts or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. TEXAS ROADHOUSE
Performance |
| Timeline |
| Xenia Hotels Resorts |
| TEXAS ROADHOUSE |
Xenia Hotels and TEXAS ROADHOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and TEXAS ROADHOUSE
The main advantage of trading using opposite Xenia Hotels and TEXAS ROADHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, TEXAS ROADHOUSE 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 TEXAS ROADHOUSE will offset losses from the drop in TEXAS ROADHOUSE's 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 |
| TEXAS ROADHOUSE vs. Evolution Mining Limited | TEXAS ROADHOUSE vs. Xenia Hotels Resorts | TEXAS ROADHOUSE vs. MELIA HOTELS | TEXAS ROADHOUSE vs. HYATT HOTELS A |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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