Correlation Between Xenia Hotels and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both Xenia Hotels and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on Xenia Hotels and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenia Hotels and URBAN OUTFITTERS.
Diversification Opportunities for Xenia Hotels and URBAN OUTFITTERS
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xenia and URBAN is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xenia Hotels Resorts and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of Xenia Hotels i.e., Xenia Hotels and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between Xenia Hotels and URBAN OUTFITTERS
Assuming the 90 days trading horizon Xenia Hotels is expected to generate 2.44 times less return on investment than URBAN OUTFITTERS. But when comparing it to its historical volatility, Xenia Hotels Resorts is 1.45 times less risky than URBAN OUTFITTERS. It trades about 0.04 of its potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,357 in URBAN OUTFITTERS on September 12, 2024 and sell it today you would earn a total of 2,423 from holding URBAN OUTFITTERS or generate 102.8% 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. URBAN OUTFITTERS
Performance |
| Timeline |
| Xenia Hotels Resorts |
| URBAN OUTFITTERS |
Xenia Hotels and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xenia Hotels and URBAN OUTFITTERS
The main advantage of trading using opposite Xenia Hotels and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xenia Hotels position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS's long position.| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Summit Hotel Properties | Xenia Hotels vs. ASHFORD HOSPITTRUST |
| URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |