Correlation Between Xenia Hotels and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Singapore Airlines 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 Singapore Airlines 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 Singapore Airlines Limited, you can compare the effects of market volatilities on Xenia Hotels and Singapore Airlines 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 Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Singapore Airlines.
Diversification Opportunities for Xenia Hotels and Singapore Airlines
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xenia and Singapore is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines 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 Singapore Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Airlines has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Singapore Airlines go up and down completely randomly.
Pair Corralation between Xenia Hotels and Singapore Airlines
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 1.73 times more return on investment than Singapore Airlines. However, Xenia Hotels is 1.73 times more volatile than Singapore Airlines Limited. It trades about 0.07 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.04 per unit of risk. If you would invest 1,350 in Xenia Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Xenia Hotels Resorts or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. Singapore Airlines Limited
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Singapore Airlines |
Xenia Hotels and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Singapore Airlines
The main advantage of trading using opposite Xenia Hotels and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Singapore Airlines 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 Singapore Airlines will offset losses from the drop in Singapore Airlines' long position.| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Ryman Hospitality Properties | Xenia Hotels vs. Park Hotels Resorts | Xenia Hotels vs. Pebblebrook Hotel Trust |
| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR | Singapore Airlines vs. Southwest Airlines Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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