Correlation Between CAP LEASE and Host Hotels
Can any of the company-specific risk be diversified away by investing in both CAP LEASE and Host 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 CAP LEASE and Host Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Host Hotels Resorts, you can compare the effects of market volatilities on CAP LEASE and Host 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 CAP LEASE with a short position of Host Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Host Hotels.
Diversification Opportunities for CAP LEASE and Host Hotels
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAP and Host is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and CAP 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 CAP LEASE AVIATION are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of CAP LEASE i.e., CAP LEASE and Host Hotels go up and down completely randomly.
Pair Corralation between CAP LEASE and Host Hotels
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to generate 3.67 times more return on investment than Host Hotels. However, CAP LEASE is 3.67 times more volatile than Host Hotels Resorts. It trades about 0.17 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.23 per unit of risk. If you would invest 50.00 in CAP LEASE AVIATION on November 28, 2024 and sell it today you would earn a total of 9.00 from holding CAP LEASE AVIATION or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Host Hotels Resorts
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Host Hotels Resorts |
CAP LEASE and Host Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Host Hotels
The main advantage of trading using opposite CAP LEASE and Host Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE position performs unexpectedly, Host 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 Host Hotels will offset losses from the drop in Host Hotels' long position.| CAP LEASE vs. Arrow Electronics | CAP LEASE vs. Solstad Offshore ASA | CAP LEASE vs. Ruffer Investment | CAP LEASE vs. Kinnevik Investment AB |
| Host Hotels vs. Wheaton Precious Metals | Host Hotels vs. METALL ZUG AG | Host Hotels vs. Resolute Mining Limited | Host Hotels vs. AfriTin Mining |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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