Correlation Between AbbVie and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both AbbVie 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 AbbVie and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AbbVie Inc and Xenia Hotels Resorts, you can compare the effects of market volatilities on AbbVie 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 AbbVie with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of AbbVie and Xenia Hotels.
Diversification Opportunities for AbbVie and Xenia Hotels
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AbbVie and Xenia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AbbVie Inc 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 AbbVie 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 AbbVie Inc 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 AbbVie i.e., AbbVie and Xenia Hotels go up and down completely randomly.
Pair Corralation between AbbVie and Xenia Hotels
Assuming the 90 days horizon AbbVie is expected to generate 3.43 times less return on investment than Xenia Hotels. But when comparing it to its historical volatility, AbbVie Inc is 1.44 times less risky than Xenia Hotels. It trades about 0.07 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,390 in Xenia Hotels Resorts on September 12, 2024 and sell it today you would earn a total of 110.00 from holding Xenia Hotels Resorts or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AbbVie Inc vs. Xenia Hotels Resorts
Performance |
| Timeline |
| AbbVie Inc |
| Xenia Hotels Resorts |
AbbVie and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AbbVie and Xenia Hotels
The main advantage of trading using opposite AbbVie and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AbbVie 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.| AbbVie vs. Mitsubishi Gas Chemical | AbbVie vs. Soken Chemical Engineering | AbbVie vs. CITY OFFICE REIT | AbbVie vs. AIR PRODCHEMICALS |
| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Summit Hotel Properties | Xenia Hotels vs. ASHFORD HOSPITTRUST |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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