Correlation Between WIMFARM SA and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA 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 WIMFARM SA and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and Xenia Hotels Resorts, you can compare the effects of market volatilities on WIMFARM SA 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 WIMFARM SA with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and Xenia Hotels.
Diversification Opportunities for WIMFARM SA and Xenia Hotels
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between WIMFARM and Xenia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO 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 WIMFARM SA 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 WIMFARM SA EO 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 WIMFARM SA i.e., WIMFARM SA and Xenia Hotels go up and down completely randomly.
Pair Corralation between WIMFARM SA and Xenia Hotels
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 2.91 times more return on investment than Xenia Hotels. However, WIMFARM SA is 2.91 times more volatile than Xenia Hotels Resorts. It trades about 0.01 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about -0.08 per unit of risk. If you would invest 385.00 in WIMFARM SA EO on November 8, 2024 and sell it today you would lose (6.00) from holding WIMFARM SA EO or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. Xenia Hotels Resorts
Performance |
| Timeline |
| WIMFARM SA EO |
| Xenia Hotels Resorts |
WIMFARM SA and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and Xenia Hotels
The main advantage of trading using opposite WIMFARM SA and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA 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.| WIMFARM SA vs. Chiba Bank | WIMFARM SA vs. East Africa Metals | WIMFARM SA vs. Eidesvik Offshore ASA | WIMFARM SA vs. Erste Group Bank |
| Xenia Hotels vs. Applied Materials | Xenia Hotels vs. Summit Materials | Xenia Hotels vs. APPLIED MATERIALS | Xenia Hotels vs. Mitsubishi Materials |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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