Correlation Between Xenia Hotels and Tokyu Construction
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Tokyu Construction 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 Tokyu Construction 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 Tokyu Construction Co, you can compare the effects of market volatilities on Xenia Hotels and Tokyu Construction 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 Tokyu Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Tokyu Construction.
Diversification Opportunities for Xenia Hotels and Tokyu Construction
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and Tokyu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Tokyu Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu Construction 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 Tokyu Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu Construction has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Tokyu Construction go up and down completely randomly.
Pair Corralation between Xenia Hotels and Tokyu Construction
Assuming the 90 days trading horizon Xenia Hotels Resorts is expected to generate 2.33 times more return on investment than Tokyu Construction. However, Xenia Hotels is 2.33 times more volatile than Tokyu Construction Co. It trades about 0.06 of its potential returns per unit of risk. Tokyu Construction Co is currently generating about 0.11 per unit of risk. If you would invest 1,329 in Xenia Hotels Resorts on October 29, 2024 and sell it today you would earn a total of 81.00 from holding Xenia Hotels Resorts or generate 6.09% 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. Tokyu Construction Co
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Tokyu Construction |
Xenia Hotels and Tokyu Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Tokyu Construction
The main advantage of trading using opposite Xenia Hotels and Tokyu Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Tokyu Construction 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 Tokyu Construction will offset losses from the drop in Tokyu Construction's long position.| Xenia Hotels vs. Acadia Healthcare | Xenia Hotels vs. Cal Maine Foods | Xenia Hotels vs. Molina Healthcare | Xenia Hotels vs. CVS Health |
| Tokyu Construction vs. Jacquet Metal Service | Tokyu Construction vs. GREENX METALS LTD | Tokyu Construction vs. NH HOTEL GROUP | Tokyu Construction vs. Ringmetall SE |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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