Correlation Between Xenia Hotels and Take Two
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and Take Two 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 Take Two 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 Take Two Interactive Software, you can compare the effects of market volatilities on Xenia Hotels and Take Two 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 Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and Take Two.
Diversification Opportunities for Xenia Hotels and Take Two
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and Take is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and Take Two go up and down completely randomly.
Pair Corralation between Xenia Hotels and Take Two
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 2.98 times less return on investment than Take Two. In addition to that, Xenia Hotels is 1.05 times more volatile than Take Two Interactive Software. It trades about 0.02 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about 0.07 per unit of volatility. If you would invest 10,260 in Take Two Interactive Software on November 1, 2024 and sell it today you would earn a total of 7,740 from holding Take Two Interactive Software or generate 75.44% 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. Take Two Interactive Software
Performance |
| Timeline |
| Xenia Hotels Resorts |
| Take Two Interactive |
Xenia Hotels and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and Take Two
The main advantage of trading using opposite Xenia Hotels and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| Xenia Hotels vs. National Health Investors | Xenia Hotels vs. WIMFARM SA EO | Xenia Hotels vs. CVS Health | Xenia Hotels vs. Australian Agricultural |
| Take Two vs. REGAL HOTEL INTL | Take Two vs. KENEDIX OFFICE INV | Take Two vs. Xenia Hotels Resorts | Take Two vs. DALATA HOTEL |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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