Correlation Between ABO-GROUP ENVIRONMENT and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both ABO-GROUP ENVIRONMENT and Xenia 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 ABO-GROUP ENVIRONMENT and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABO GROUP ENVIRONMENT and Xenia Hotels Resorts, you can compare the effects of market volatilities on ABO-GROUP ENVIRONMENT and Xenia 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 ABO-GROUP ENVIRONMENT with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABO-GROUP ENVIRONMENT and Xenia Hotels.
Diversification Opportunities for ABO-GROUP ENVIRONMENT and Xenia Hotels
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ABO-GROUP and Xenia is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ABO GROUP ENVIRONMENT and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts and ABO-GROUP ENVIRONMENT 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 ABO GROUP ENVIRONMENT are associated (or correlated) with Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of ABO-GROUP ENVIRONMENT i.e., ABO-GROUP ENVIRONMENT and Xenia Hotels go up and down completely randomly.
Pair Corralation between ABO-GROUP ENVIRONMENT and Xenia Hotels
Assuming the 90 days trading horizon ABO GROUP ENVIRONMENT is expected to under-perform the Xenia Hotels. But the stock apears to be less risky and, when comparing its historical volatility, ABO GROUP ENVIRONMENT is 1.47 times less risky than Xenia Hotels. The stock trades about -0.14 of its potential returns per unit of risk. The Xenia Hotels Resorts is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,228 in Xenia Hotels Resorts on October 18, 2024 and sell it today you would earn a total of 182.00 from holding Xenia Hotels Resorts or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABO GROUP ENVIRONMENT vs. Xenia Hotels Resorts
Performance |
| Timeline |
| ABO GROUP ENVIRONMENT |
| Xenia Hotels Resorts |
ABO-GROUP ENVIRONMENT and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABO-GROUP ENVIRONMENT and Xenia Hotels
The main advantage of trading using opposite ABO-GROUP ENVIRONMENT and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABO-GROUP ENVIRONMENT position performs unexpectedly, Xenia 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| ABO-GROUP ENVIRONMENT vs. MCEWEN MINING INC | ABO-GROUP ENVIRONMENT vs. Harmony Gold Mining | ABO-GROUP ENVIRONMENT vs. Zijin Mining Group | ABO-GROUP ENVIRONMENT vs. De Grey Mining |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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