Correlation Between Global Ship and Host Hotels
Can any of the company-specific risk be diversified away by investing in both Global Ship and Host Hotels 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 Global Ship and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Host Hotels Resorts, you can compare the effects of market volatilities on Global Ship and Host Hotels 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 Global Ship with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Host Hotels.
Diversification Opportunities for Global Ship and Host Hotels
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Host is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Global Ship 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 Global Ship Lease are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Global Ship i.e., Global Ship and Host Hotels go up and down completely randomly.
Pair Corralation between Global Ship and Host Hotels
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Host Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Global Ship Lease is 1.2 times less risky than Host Hotels. The stock trades about -0.05 of its potential returns per unit of risk. The Host Hotels Resorts is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,610 in Host Hotels Resorts on August 31, 2024 and sell it today you would earn a total of 120.00 from holding Host Hotels Resorts or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Host Hotels Resorts
Performance |
| Timeline |
| Global Ship Lease |
| Host Hotels Resorts |
Global Ship and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Host Hotels
The main advantage of trading using opposite Global Ship and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Host Hotels 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| Global Ship vs. Coeur Mining | Global Ship vs. IMAGIN MEDICAL INC | Global Ship vs. AVITA Medical | Global Ship vs. Consolidated Communications Holdings |
| Host Hotels vs. Park Hotels Resorts | Host Hotels vs. Pebblebrook Hotel Trust | Host Hotels vs. Sunstone Hotel Investors | Host Hotels vs. Summit Hotel Properties |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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