Correlation Between Air Lease and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Xenia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Xenia Hotels Resorts, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Xenia Hotels.
Diversification Opportunities for Air Lease and Xenia Hotels
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Xenia is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease 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 Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Xenia Hotels go up and down completely randomly.
Pair Corralation between Air Lease and Xenia Hotels
Assuming the 90 days trading horizon Air Lease is expected to generate 0.95 times more return on investment than Xenia Hotels. However, Air Lease is 1.05 times less risky than Xenia Hotels. It trades about 0.05 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.04 per unit of risk. If you would invest 3,314 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,426 from holding Air Lease or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Xenia Hotels Resorts
Performance |
| Timeline |
| Air Lease |
| Xenia Hotels Resorts |
Air Lease and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Xenia Hotels
The main advantage of trading using opposite Air Lease and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |