Correlation Between Xenia Hotels and ATT
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Xenia Hotels and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and ATT.
Diversification Opportunities for Xenia Hotels and ATT
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and ATT is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and ATT go up and down completely randomly.
Pair Corralation between Xenia Hotels and ATT
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 1.83 times less return on investment than ATT. In addition to that, Xenia Hotels is 1.24 times more volatile than ATT Inc. It trades about 0.04 of its total potential returns per unit of risk. ATT Inc is currently generating about 0.1 per unit of volatility. If you would invest 1,343 in ATT Inc on September 1, 2024 and sell it today you would earn a total of 855.00 from holding ATT Inc or generate 63.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Xenia Hotels Resorts vs. ATT Inc
Performance |
| Timeline |
| Xenia Hotels Resorts |
| ATT Inc |
Xenia Hotels and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and ATT
The main advantage of trading using opposite Xenia Hotels and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Xenia Hotels vs. CARSALESCOM | Xenia Hotels vs. SMA Solar Technology | Xenia Hotels vs. Tradeweb Markets | Xenia Hotels vs. AECOM TECHNOLOGY |
| ATT vs. The Trade Desk | ATT vs. Constellation Software | ATT vs. Alfa Financial Software | ATT vs. CARSALESCOM |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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