Correlation Between Xenia Hotels and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and ULTRA CLEAN 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 ULTRA CLEAN 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 ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Xenia Hotels and ULTRA CLEAN 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 ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and ULTRA CLEAN.
Diversification Opportunities for Xenia Hotels and ULTRA CLEAN
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and ULTRA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS 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 ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Xenia Hotels and ULTRA CLEAN
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 2.21 times less return on investment than ULTRA CLEAN. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.0 times less risky than ULTRA CLEAN. It trades about 0.14 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,060 in ULTRA CLEAN HLDGS on September 1, 2024 and sell it today you would earn a total of 560.00 from holding ULTRA CLEAN HLDGS or generate 18.3% 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. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Xenia Hotels Resorts |
| ULTRA CLEAN HLDGS |
Xenia Hotels and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and ULTRA CLEAN
The main advantage of trading using opposite Xenia Hotels and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Xenia Hotels vs. CARSALESCOM | Xenia Hotels vs. SMA Solar Technology | Xenia Hotels vs. Tradeweb Markets | Xenia Hotels vs. AECOM TECHNOLOGY |
| ULTRA CLEAN vs. DEVRY EDUCATION GRP | ULTRA CLEAN vs. WILLIS LEASE FIN | ULTRA CLEAN vs. G8 EDUCATION | ULTRA CLEAN vs. Grand Canyon Education |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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