Correlation Between Tradeweb Markets and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets 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 Tradeweb Markets and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and Xenia Hotels Resorts, you can compare the effects of market volatilities on Tradeweb Markets 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 Tradeweb Markets with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Xenia Hotels.
Diversification Opportunities for Tradeweb Markets and Xenia Hotels
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tradeweb and Xenia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets i.e., Tradeweb Markets and Xenia Hotels go up and down completely randomly.
Pair Corralation between Tradeweb Markets and Xenia Hotels
Assuming the 90 days horizon Tradeweb Markets is expected to generate 0.75 times more return on investment than Xenia Hotels. However, Tradeweb Markets is 1.34 times less risky than Xenia Hotels. It trades about 0.15 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.03 per unit of risk. If you would invest 9,681 in Tradeweb Markets on September 3, 2024 and sell it today you would earn a total of 3,319 from holding Tradeweb Markets or generate 34.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. Xenia Hotels Resorts
Performance |
| Timeline |
| Tradeweb Markets |
| Xenia Hotels Resorts |
Tradeweb Markets and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and Xenia Hotels
The main advantage of trading using opposite Tradeweb Markets and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets 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.| Tradeweb Markets vs. Apple Inc | Tradeweb Markets vs. Apple Inc | Tradeweb Markets vs. Apple Inc | Tradeweb Markets vs. Apple Inc |
| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Ryman Hospitality Properties | Xenia Hotels vs. Park Hotels Resorts | Xenia Hotels vs. Pebblebrook Hotel Trust |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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