Correlation Between Xenia Hotels and SCANSOURCE (SC3SG)
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) 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 SCANSOURCE, you can compare the effects of market volatilities on Xenia Hotels and SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and SCANSOURCE (SC3SG).
Diversification Opportunities for Xenia Hotels and SCANSOURCE (SC3SG)
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xenia and SCANSOURCE is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE (SC3SG) has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and SCANSOURCE (SC3SG) go up and down completely randomly.
Pair Corralation between Xenia Hotels and SCANSOURCE (SC3SG)
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to under-perform the SCANSOURCE (SC3SG). In addition to that, Xenia Hotels is 1.4 times more volatile than SCANSOURCE. It trades about -0.11 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.26 per unit of volatility. If you would invest 4,580 in SCANSOURCE on October 22, 2024 and sell it today you would earn a total of 240.00 from holding SCANSOURCE or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. SCANSOURCE
Performance |
| Timeline |
| Xenia Hotels Resorts |
| SCANSOURCE (SC3SG) |
Xenia Hotels and SCANSOURCE (SC3SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and SCANSOURCE (SC3SG)
The main advantage of trading using opposite Xenia Hotels and SCANSOURCE (SC3SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, SCANSOURCE (SC3SG) 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 SCANSOURCE (SC3SG) will offset losses from the drop in SCANSOURCE (SC3SG)'s long position.| Xenia Hotels vs. AEON METALS LTD | Xenia Hotels vs. WillScot Mobile Mini | Xenia Hotels vs. BRIT AMER TOBACCO | Xenia Hotels vs. Osisko Metals |
| SCANSOURCE (SC3SG) vs. ASM Pacific Technology | SCANSOURCE (SC3SG) vs. Casio Computer CoLtd | SCANSOURCE (SC3SG) vs. Ross Stores | SCANSOURCE (SC3SG) vs. RETAIL FOOD GROUP |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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